Economics
New Keynesian DGSE models need financial spillover channels – ECB paper
Models without powerful financial spillover channels will be “misleading”- researchers
Pakistan growth hits decade high – SBP report
Central bank says high growth, low inflation and solid investment are nevertheless overshadowed by falling exports, which have impacted reserves
Italian paper looks at effects of crisis on interbank network
Integration fell in 2007–8 but rose after ECB adopted unconventional policy, paper finds
Survey data can help with modelling expectations – BoJ paper
Discussion paper outlines method of incorporating survey data as a proxy for expectations, with “promising” results for inflation modelling in the US and Japan
‘Multiple lending’ may cause contagion during stress – paper
Researchers say multiple lending may ease liquidity shocks in normal conditions, however
Norges Bank study: regional network is supplying useful information
Central bank’s network of contacts is able to deliver better information on growth than other sources, report finds
ECB paper calls for EU-wide bond-issuing agency
Authors propose the ECB and a bond issuer should work together to stimulate eurozone
Term premiums matter for inflation – BoJ paper
Term premiums domestically and abroad appear to affect inflation via the exchange rate channel, authors find
IMF economist builds agent-based banking system model
Model captures the diversity of agents and the use of rules of thumb; the author says the modular nature allows “straightforward” enhancements
Riksbank unveils results of web-scraping project
The big data technique for collecting prices could better capture volatile inflation components, allowing for more accurate forecasts, economists say
UK election roundup: all eyes on Brexit negotiations
Economists react as UK vote delivers a hung parliament, casting doubt on the way forward with Brexit negotiations and causing a drop in the pound
Obstfeld and Taylor back dual trilemma global finance theory
Economists still need to better incorporate financial stability into their thinking, the authors argue, with the concept of a financial trilemma helping to explain recent instability
Culture has ‘significant’ effect on Swiss saving – paper
Researcher uses data from linguistically different Swiss groups
‘Home bias’ in expectations heightens shocks – paper
Researchers present a model where domestic variables shape expectations
Central banks should test robustness of their main macro models – paper
Bank of Canada paper says users of large-scale macroeconomic models should develop tools to assess whether non-linearities could be distorting results
Irish paper examines why banks set collateral conditions
Ex-ante risk and loan size are key factors, researchers say
Riksbank paper studies impact of oil on world business cycle
Researchers find possible solution to macro puzzles by introducing oil shocks into a model of the global economy
BoJ paper attempts to ditch Friedman rule with new model
Paper outlines model where mild inflation is welfare-optimising, in contrast to Milton Friedman’s rule implying mild deflation, which underpins many monetary models
IMF working paper assess fiscal councils
Research considers the efficacy of independent fiscal institutions in “taming the deficit bias” that emerged in the 1970s, as well as assessing their performance more recently
IMF urges action to prevent global economy ‘stalling’ and ease central bank burden
Maurice Obstfeld highlights risk of “widespread secular stagnation” as IMF publishes latest WEO; details fiscal and structural support needed to ease burden on monetary policy
BoE searches for better data on macro-financial links
As part of efforts to crack the UK’s productivity puzzle, the BoE plans improved data-gathering, seeking insight into the impact of capital accumulation and access to finance
BIS’s Shin argues bank capital underpins both monetary policy and financial stability
Research sheds light on tension between bank shareholders and wider society, as high levels of capital support lending and therefore affect the real economy as well as the financial sector
Israel must close productivity gap, Flug says
Bank of Israel governor calls on government to work on closing gap with advanced economies, which could boost living standards by a third, she says
Europe set for new Greek clash as Lagarde hits back over leaks
IMF chief has sharp words for the Greek prime minister after staff phone conversation is posted online by Wikileaks; debt relief remains a major sticking point as July repayment looms