Research
Break-even value of PMI is not 50 but 44, RBI working paper suggests
Wholesale Price Index inflation turns positive when PMI exceed 44, according to research; paper also finds that PMI predict the movements of final WPI
NY Fed research constructs composite model for core inflation
Paper finds that price changes in core goods and services are driven by different forces; capturing this distinction enables researches to map core inflation more accurately
Surge in excess reserves drives overnight interbank rate to ‘floor of corridor'
Dynamics in the overnight money market are in line with ‘expected consequences of market stresses and unconventional monetary policies' according to RBA working paper
‘Tiered' clearing networks increases CCP risk, study finds
Complex clearing networks ‘appear to increase' some risks faced by CCPs, according to working paper investigating the ‘topology' of such networks
Employment losses have repaired corporate balance sheets, paper argues
Differences in post-crisis employment among EU members are largely driven by need in many countries to adjust balance sheets, according to IMF working paper
Boston Fed paper flags need for research into debt dynamics in recovery period
Research into the relationship between debt and consumption to the household level is ‘limited’ and does not ‘directly speak’ to the United States' recent weak performance, says discussion paper
NY Fed blog post points to fiscal implications of Fed policies
NY Fed blog post notes Fed policy impact on government fiscal position is much broader than the direct influence remittances from Fed earnings have on government finances
UK-French paper examines monetary policy implications of wage changes
Researchers find that wage changes are clustered at the beginning of the year in many European countries, but this makes ‘little difference’ to the optimal policy response across quarters
Canadian quarterly review outlines toolkit for analysing current economic performance
Summer 2013 edition of the BoC's review contains four articles outlining the bank's latest thinking and methods of analysing current economic trends at home and abroad
ECB paper finds capital controls can increase stock price volatility
Research paper finds that a tax on capital inflows can stabilise currency markets, but amplify shocks in single-country stock markets
Fed researchers find effects of QE ‘minimal' without guidance on rates
Paper by senior economists from the New York and San Francisco Feds argues that signalling a rate rise will be far more meaningful than communication on when asset purchases might come to an end
BIS paper weighs up early-warning indicators
Working paper examines which indicators are most effective at foreshadowing banking crises; uses a new statistical method based on particular policy requirements
Kenyan governor urges bond market reform
Njuguna Ndung’u calls for a wider trading platform in the secondary market to incorporate OTC products; criticises the ‘slow pace’ of reforms so far
Sector-specific variables more relevant than thought in determining default risk
The effect and magnitude of risk drivers across sectors is highly heterogeneous, which should be taken into account when designing stress-testing analytical tools, research paper argues
Croatia among EU members whose spreads are most affected by fundamentals
While spillovers from external shocks remain the dominant factor in spreads EU-wide, Croatia is among those where fundamentals are playing an increasingly influential role
Bofit paper says depositor sensitivity to market rumours increased in crisis
Bank of Finland discussion paper analyses market discipline in Central European countries; finds depositors were increasingly influenced by market rumours during the financial crisis
Fall in equities most significant global impact of euro crisis, says ECB paper
Working paper measures impact of euro debt crisis on global financial markets; says the transmission ‘hinges more on trade than on finance’
Bundesbank paper says EU convergence is a myth
Researchers identify a split between old and new, western and eastern member states; incomes are converging between smaller groups of countries rather than the EU collective
US households stick with favourite payment methods
According to a recent study, households use ‘one or at most two' of cash, cheque and card when paying the bills
Competition makes mutuals safer, commercial banks riskier
Bank of Korea research paper shows higher concentration in a less competitive loan market has increased default risks of mutual savings banks since the recent crisis
Spanish paper preaches caution over DSGE models
Researcher finds that DSGE models would not have proved any more use to policy-makers in the 1970s than their ‘old-style’ Phillips curves; warns against putting too much faith in their prescriptions
Bundesbank paper says media exposure shapes inflation expectations
Discussion paper examines how and why inflation expectations differ between the German population; where people go for news is an important factor
International banks pose risk to global financial system, NY Fed paper finds
Evidence from 2007 suggests banks can more easily deal with a credit crunch in their home jurisdiction than they can overseas, which could be a weak point in the global system, paper finds
‘Striking similarities' between eurozone and the pre-1914 gold standard
Both monetary arrangements provide underdeveloped peripheral countries with easy access to capital from the core countries, triggering asset price booms via the banking system in peripheral countries