Research
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
IMF working paper calls for consistency in East African monetary policy
Study into monetary transmission mechanism in the East African Community finds policy tools often used in a contradictory manner
Colombian paper finds flaws in inflation forecasting
Research by the Central Bank of Colombia says many central banks have scope to improve the accuracy of their inflation forecasts
BIS paper anatomises global liquidity
Study finds liquidity conditions are shaped by credit supply, credit demand, and monetary policy; financial crisis a product of all three
San Francisco Fed dissects long-term unemployment
Long-term unemployment has ‘persisted remarkably’ since outset of recession; should disappear over time as economic activity increases
Dutch paper says foreign banks can help or harm developing markets
Working paper finds foreign-owned banks in developing countries can provide cheaper and higher quality financial services, but may also transmit shocks across borders
Taylor challenges efficacy of central bank independence
Without a rules-based framework central banks tend to stretch the bounds of their independence, and the results tend to be poor, John Taylor says
ECB paper tweaks the evaluation of early warning systems
Research proposes changes in the way the costs and benefits of early warning systems are calculated
Fed research paper finds uncertainty more damaging at the zero lower bound
New paper finds the zero lower bound has exacerbated the effect of uncertainty in the ‘Great Recession'
IMF research lends support to exchange rate liberalisation
Working paper concludes exchange rate liberalisation in sub-Saharan Africa ended a prolonged crisis and prompted a ‘strong and ongoing’ economic expansion
Canadian study links financial development and income volatility
Working paper finds financial development can dampen the impact of technological shocks on the economy
New paper finds Colombia could be in the midst of a housing bubble
'New-fangled method' of detecting bubbles finds Colombian housing could be in a bubble right now, though findings may not be robust
RBA paper investigates post-crisis leap in currency demand
Despite government deposit guarantee, demand for Australian banknotes increased by 12% following Lehman Brothers collapse
French paper stands up for early-warning signals
Research finds the often-condemned early-warning signals can contribute practically to policy-making, when taken seriously