Research
RBI paper measures threshold of sustainable current account deficit in India
Working paper warns of risks posed by large current account deficits; finds sustainable level of deficit has risen since balance of payments crisis in the 1990s
Banque de France paper highlights risks of financial markets opacity
Researchers find imperfect information on financial intermediaries’ exposures encourages risk-taking; suggest low interest rates and ‘gambling for resurrection’ raise systemic risk
National Bank of Belgium paper studies effect of shocks on US trade balance
Working paper analyses link between shocks to the marginal efficiency of investment and the US trade balance; argues this constitutes a significant element in forecasting US trade fluctuations
Central Bank of Colombia paper finds delayed monetary policy responses
Working paper develops new models of output gap and neutral interest rate; argues interest rate changes by central bank lag behind movements in output
IMF paper studies effect of global environment on domestic bond yields
Working paper analyses link between global economic conditions and emerging market domestic bond yields; finds financial market turmoil raises sensitivity to government spending increases
IMF paper warns against delays in Japanese fiscal consolidation
Working paper studies impact of budget deficit in Japan on intergenerational inequality; finds delaying budget cuts would adversely affect younger generations
Central Bank of Chile paper supports unit root-based inflation forecasts
Working paper argues unit root-based models can create effective inflation forecasts; tests findings based on data from US, Canada and Sweden
Cleveland Fed researchers find fault with BoE’s Funding for Lending
‘Economic Trends’ research from the Federal Reserve Bank of Cleveland identifies possible flaws in the Bank of England’s Funding for Lending Scheme; warns of risk to independence
BIS paper assesses impact of public recapitalisations on bank risk
Research analyses changes in risk levels in banks that required public funding during the financial crisis; finds no consistent evidence that rescued banks reduced their risk by more than other banks
IMF paper estimates social costs imposed by systemic liquidity risk
Working paper develops systemic liquidity risk index to evaluate social cost created by liquidity assistance to financial sector; suggests premium could be imposed on banks to cover cost
RBI paper investigates relationship between liquidity types
Researchers study a variety of liquidity indicators to determine the links between them; argue that although there is a relationship, this nevertheless may not be a suitable guide to policy
Bank of Japan paper examines reasons behind chronic deflation
Working paper gives overview of a number of factors that may have caused persistent deflation in Japan since the mid-1990s; says it is difficult to single out a dominant explanation
National Bank of Serbia paper finds strong domestic bank lending channel
Working paper identifies 'significant' impact of monetary policy on domestic currency loan growth through bank lending channel; says channel is weak for foreign currency loans
BIS paper links funding to emerging economies and stock market volatility
Working paper studies funding flows between emerging market central banks and investors during stock market calm and volatility; suggests this reinforces risk-on and risk-off markets
IMF paper highlights risks of higher inflation targets
Researchers assess the effects of increasing inflation targets; argue this can help prevent problems of a zero lower bound, but the overall impact on welfare is negative
IMF paper warns against frontloaded fiscal adjustment
Working paper studies changes in fiscal multipliers based on economy’s position in the business cycle; cautions that large budget cuts are likely to create or worsen recessions
Deutsche Bundesbank paper studies developments in financial connections
Discussion paper analyses changes in connectedness of financial institutions following financial crisis; suggests possible stability benefits created by bank bailouts
RBI paper finds monetary policy undermined by unsustainable deficits
Researchers assess link between high government debt and persistent inflation; find restrictive monetary policy may struggle to contain inflation if accompanied by a large budget deficit
RBI research examines debt management conflict of interest
Working paper discusses whether the Reserve Bank of India’s dual monetary policy and debt management roles affect price stability mandate; finds little evidence of impact
Bank of Canada paper finds major benefits of QE in UK and US
Researchers study impact of asset purchases by Federal Reserve and Bank of England; identify ‘powerful effect’ on output and inflation
St Louis Fed research stresses importance of money
Working paper argues that money is essential in determining prices, despite monetary aggregates being largely ignored by central banks; says central banks have limited power over interest rates
Central Bank of Chile paper discusses adaptations to macro-prudential policy
Research highlights importance of considering non-core bank liabilities in setting macro-prudential policy; suggests levy on such liabilities would have counter-cyclical benefits
BoE paper models risk of financial shock amplification
Working paper develops model of financial system linkages to illustrate shock transmission; finds spread of defaults is amplified by fire sales and curtailed lending
IMF paper finds changing resilience of emerging markets to financial shocks
Working paper assesses net change in ability of emerging markets to absorb financial shocks; says improved economic fundamentals are offset by vulnerabilities due to inflexible exchange rates