Research
Research maps Norwegian challenges if oil prices stay low
Economic commentary considers how the increase in oil prices over the past decade has affected Norway in a bid to understand how the recent price drop could play out
BIS paper studies impact of Swiss CCB on quality of credit
Working paper finds activation of countercyclical capital buffer affected the composition of mortgage lenders in two key ways
UK payments have room for improvement, report finds
Report identifies priorities for better payments among consumers, businesses and government, finding desire for faster, more flexible payments with less room for error
Economics needs a ‘replication journal’, paper argues
Natural and life scientists spend considerable time attempting to replicate the results of earlier research; economics could benefit from a similar approach, St Louis Fed paper argues
Household debt had modest impact on US consumption, research finds
Household debt in the US accounted only slightly for the decline in household consumption nationally in the 2000s, research published by ECB finds
BIS paper finds emerging market corporations exploiting carry trade
Study of emerging market foreign currency-denominated bond issuance by Bruno and Shin finds corporations appear to be issuing bonds as part of a carry trade, rather than financing investment
IMF paper explores capital inflows and credit growth
Working paper finds an increase in capital inflows can fuel credit growth, but it depends on their composition; no ‘significant’ connection with foreign direct investment
Eurozone QE has ‘significantly increased inequality’, Bundesbank paper argues
Asset price changes following the introduction of eurozone quantitative easing have largely benefited the wealthiest households, a Bundesbank working paper says
Equity price growth rate ‘leading indicator’ of bank loans, French paper argues
Comparing two models of domestic credit dynamics to recent French data shows the importance of equity price growth rates, according to a Banque de France working paper
Capital controls ineffective at handling policy trilemma, ECB paper finds
Emerging market capital controls have a limited impact on monetary policy trilemma variables and come with spillover effects, the authors warn
Inflation targeting should be improved, not replaced, RBA paper says
Rather than a ‘fundamental re-engineering’ of inflation targeting, central banks should adopt a flexible approach that pays some heed to output, authors argue
Limited liability distorts incentives for disaster planning, paper argues
Consequences of recent events with catastrophic financial ramifications have been greatly aggravated by policy-makers’ failure to prepare, says ECB working paper
Strategic default helps explain crises in advanced economies, ECB paper finds
Sovereign debt and financial re-allocation are linked by the use of government bonds as collateral on the interbank lending market, paper notes
BIS researchers dissect emerging market fire sales
Working paper picks apart the channels through which asset management impacts on emerging bond markets, finding evidence of procyclical behaviour
RBA paper finds distribution matters when assessing impact of wealth effects
Example of car buying highlights how different households adjust consumption in response to housing wealth effects, although channels remain unclear
Leverage is key factor in threat posed by bubbles, study finds
A San Francisco Fed study of 17 bubbles over the past 140 years provides empirical support for the idea that leveraged bubbles have most potential for damage
Stress indexes have widely varying signal benefits, Fed paper says
Cleveland’s index gives the best picture of current financial stress conditions, but few indexes have value in predicting future problems, Cleveland Fed study says
Fed data gives model of banks’ settlement service choices, paper argues
Data from the Fed’s Fedwire payment service shows that banks select payment services based on average rather than marginal cost, study finds
Trawl through BoJ archives reveals emergence of current policy-making
Study of failures and successes of BoJ policy-making in the 1980s reveals the emergence of current thinking about how best to conduct monetary policy
FOMC forecasts perform better in short- than long-term, Fed paper finds
Forecasts prepared ahead of FOMC meetings from 1997-2008 considerably outperform benchmarks at short horizons, but the results are much more mixed in the longer term
IMF paper: capital inflows work differently on credit for households and firms
The composition of capital inflows affects whether and how they cause credit growth, IMF working paper says
Regulators face trade-off over publishing stress test results
Regulators publishing stress test results may inhibit frankness by bankers, a Philadelphia Fed working paper argues, but confidentiality brings its own risks
CoCo bonds decrease banks’ appetite for risk, paper argues
Convertible bonds decrease banks’ incentives to take risks in highly-leveraged states, a DNB working paper argues
Irish central bank paper finds high cost to hasty austerity
Economists find most of the costs of fiscal consolidation from 2011-13 could have been avoided if policy-makers waited until the zero lower bound was no longer a constraint