Research
ECB paper flags risk of ‘collateral damage’ from financial transaction tax
Working paper finds an increase in transaction costs, such as the financial transaction tax mooted in the EU, could impact the availability of collateral and damage market liquidity
Balance sheet policies may not be enough to lift expectations, Dutch research finds
Working paper analyses the impact of credit and quantitative easing policies on inflation expectations, finding central banks may need to do more to lift them
ECB research finds Greenspan's Fed responded aggressively to uncertainty
Working paper finds the Federal Reserve under Alan Greenspan took stronger action as economic uncertainty rose. In fact, risk seems to have been more significant than ‘conventional’ variables
Bank of Korea paper investigates link between liquidity and commodity prices
Researchers find certain commodity prices became more sensitive to global liquidity following the 2008 financial crisis
IMF researchers explore central bank security issuance
Working paper finds low-income countries may struggle to issue central bank securities on account of the administrative costs and infrastructure demands
CPI not ideal for comparing inflation rates, research finds
Economist at Sveriges Riksbank says CPI is a good measure of inflation but is ‘not well suited’ to making international comparisons of inflation rates
High liquidity creation increases probability of bank failure, IMF paper warns
Working paper published by the IMF says regulators can reduce costs of bank failure by identifying high liquidity creators early and monitoring them closely
Household expectations help flesh out inflation picture, research finds
Research published in the latest Bank of Canada review argues that looking at the behaviour of expectations since the crisis helps in understanding evolution of inflation
RBA paper unpacks central bank’s DSGE model
Authors shed light on adapted DSGE model used in Australia, emphasising its deliberate simplicity so additional features can be bolted on as needed
RBNZ paper investigates changes to inflation expectations after oil price shocks
Research suggests changes in expectations following real oil price shocks have ‘little or nothing to do with actual inflation outcomes’
Bundesbank paper finds misbehaving banks increase volatility
Model of imperfect information shows output becomes more volatile when depositors cannot fully hold bankers to account
Colombian paper extends Bernanke research on asset price bubbles
Paper delivered at the BIS extends Bernanke and Gertler’s result that central banks should not lean against asset bubbles, finding the conclusion still holds in a small open economy
RBA paper builds new model of banks’ credit losses
Model draws on new dataset and focuses on interactions between portfolio-level and macro variables in attempt to explain historical bank credit losses in Australia
BoJ paper finds QQE has not ‘significantly’ damaged bond market liquidity
Researchers compile set of liquidity indicators, finding that while government bond market liquidity has not declined significantly, it has been on a downward trend since easing was ramped up
St. Louis Fed paper considers impact of trade shocks on labour market
Working paper examines effects of trade shocks on labour markets, finding the increase in import competition from China after 2000 actually boosted aggregate US welfare
IMF paper finds no link between efficiency and Basel compliance
Banks in jurisdictions that have adopted Basel ‘Core Principles’ for supervision are no more efficient than their peers elsewhere, working paper finds
IMF paper studies interest rate spreads in Pacific Island countries
Economic size, inflation, the quality of bank balance sheets and banking sector concentration influence interest rate spreads in Pacific Island countries, finds working paper
RBA paper finds high social cost to counterfeiting
Researchers try to put a figure on how much counterfeit banknotes cost the economy; Australian economy suffers from lower counterfeiting than elsewhere
BIS paper analyses carry trades in Latin America
BIS working paper analyses currency carry trades in Latin America, the attractiveness and visibility of which have suffered in part due to regulatory changes
San Fran Fed research analyses link between inflation targeting and growth
In an economic letter, two researchers find developing economies tend not to experience the same short-term bump in growth rates as advanced economies after adopting a target
Impact of Fed’s QE often larger in EMs than US, research finds
IMF working paper examines cross-border effects of unconventional monetary policy in the United States using a global vector error-correction model
Chilean paper analyses ‘labour wedge’ cycles
The gap between the marginal rate of substitution (MRS) and the marginal productivity of labour (MPL) increases during recessions and is counter-cyclical in Chile, finds research
IMF paper analyses Islamic banking impact on economic growth
Islamic banking is ‘more flexible against shocks and more inclusive with regards to growth’, finds an IMF working paper
Centralising supervision may trigger more integration, ECB paper finds
Working paper suggests centralising supervision could create the need for even more centralisation; calls for ‘perimeter of banks’ supervised by central authority to be flexible