Research
Bank of Japan paper shows popping bubbles may require volatile inflation
Research finds inflation can remain stable while asset price bubbles develop, implying optimal monetary policy should tighten to reduce the bubble at the cost of below-target inflation
BIS paper urges inclusion of financial cycle in output gap calculation
Working paper warns ignoring the financial cycle when calculating the output gap can cause policy-makers to overlook unsustainable output movements
Cleveland paper trumpets value of median CPI in forecasting
Research says median CPI – a ‘trimmed’ measure of inflation – can improve the accuracy of forecasts involving a range of macroeconomic variables
ECB paper seeks to balance the arguments of eurosceptics
Researcher says sovereign debt crisis should be seen as a mix of many harmful factors rather than one single problem; offers optimistic view on the prospects for recovery
Korean paper draws macro-prudential policy lessons from history of the 2000s
Working paper draws on Korea's experience of macro-prudential policies over the last decade, which failed to shield it from the impact of the global crisis
BIS paper urges policy-makers to consider co-ordinated bond strategy
Research finds effective response to a bond market crisis has become more difficult due to heavily laden central bank balance sheets, raising the need to better co-ordinate a crisis framework
BoJ paper quantifies benefits of liquidity-saving measures in RTGS
Working paper finds introduction of liquidity-saving features in Japan’s real-time gross settlement system has saved trillions of yen; urges vigilance as monetary easing is withdrawn
IMF paper urges ‘meaningful debt restructuring’ in private sector
Study says 'now is the time' for governments to tackle households and corporate sector debt; out-of-court restructurings may be a useful tool
Bank of Portugal research adds new variable to explain export behaviour
Working paper asks whether domestic demand pressures affect Portugal's export performance; results point to asymmetric relationship
BoJ paper finds asymmetric macroprudential growth impacts
Research suggests macroprudential policy is good at cooling the economy but less effective at heating it, while the growth impact differs between tools
Systemic risk measurement gets book treatment
Jorge Chan-Lau draws on experiences at IMF, World Bank and the central banks of Canada, Chile and Malaysia to provide methods and tools to measure systemic risk
Bank of Finland paper urges QE use outside crises
Analysis based on DSGE model finds asset purchases are a useful monetary policy tool in all states of the economy, but should be co-ordinated with conventional interest rate policy
ECB researchers suggest refinements to macro stress tests
Working paper identifies a number of factors in addition to growth that determine the rate of non-performing loans; authors say this could allow for more accurate stress testing
ECB paper scrutinises fiscal multipliers in high-debt countries
Researchers assess impact of fiscal stimuli at different debt levels in Europe; caution that high debt levels may impair government’s ability to stimulate the economy
ECB researchers model systemic crises with heterogeneous interbank market
ECB working paper finds positive supply shocks feed credit booms leading to systemic banking crises
Fed paper examines costs of trend inflation variance
Study finds an increase in the volatility of trend inflation imposes a modest welfare cost on the economy
Unorthodox monetary policy would not suit Hungary, says paper
Research finds that unconventional central bank instruments have successfully eased market conditions in developed countries, but would have little impact in Hungary
ECB working paper finds fiscal consolidation improves bank balance sheets
Improvement in capital adequacy ratios results from a portfolio re-balancing from private to public debt securities, reducing the risk-weighted value of assets
National Bank of Romania struggles to keep inflation on target
Romanian inflation remains outside target band despite negative output gap, with blame pointing to energy market developments among other factors
Polish paper extolls benefits of probability forecasts
Research finds forecasting technique that seeks to quantify the uncertainty surrounding economists’ predictions has ‘rich interpretation possibilities’
Norwegian paper suggests alternative to ‘conclusion-based’ interest rate decisions
Research examines the stories behind interest rate decisions; reveals benefits to voting on contributing elements as opposed to final level
Czech researchers examine factors behind monetary transmission lags
Working paper synthesises 67 quantitative studies of lags in monetary policy transmission, finding that financial development increases lags, but results may be biased by study design
NY Fed paper highlights money market fund ‘stampede’ risk
Staff report finds intermediation by money market funds can turn unexpected withdrawals into runs, meaning a small shock can bring down the whole banking system
New York Fed paper warns of negative welfare effects of capital controls
Staff report finds significant gains available from international policy coordination, and that interventions in the international flow of capital can hit global and individual welfare