Research
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
IMF paper finds stronger and more complex fiscal rules following crises
Working paper compiles dataset of national and supra-national fiscal rules; suggests rules were strengthened after crises in the 1990s and after the financial crisis
Central Bank of Colombia paper develops early warning model of credit booms
Working paper tests model of credit booms that includes macroeconomic indicators in addition to credit growth; finds the model performs well across a number of Latin American countries
Bank of Canada paper warns of shock transmission multipliers
Working paper finds financial integration between countries leads to multiplier effects in the transmission of shocks; suggests greater investment causes greater correlation of output
BoE paper studies information in sticky and flexible prices
Working paper studies the usefulness of sticky and flexible prices in showing firms’ estimates of the output gap and inflation expectations
Fed paper finds ‘surprising’ impact of monetary policy on long-term real rates
Working paper suggests reasons for the unexpected effect of short-term monetary policy on long-term real rates; argues this is driven by demand from ‘yield-oriented’ investors
IMF paper suggests policies to sustain fast growth in India
Working paper applies lessons from fast growth in 2000s to current Indian growth slowdown; warns that progress will continue to slow if policy-makers do not act quickly
Central Bank of Chile paper finds benefits to financial exclusion
Working paper studies welfare in countries with currency pegs when access to external financial markets is restricted; finds closing capital account can increase household welfare
BIS paper argues financial systems can grow too large
Working paper examines impact of size of financial systems on productivity growth; finds size of financial sector initially boosts productivity but beyond certain threshold has negative effect
Bank of Finland paper analyses Chinese monetary policy
Discussion paper assesses the use of non-market monetary policy in China; finds policy tools are effective at controlling inflation but this depends on source of economic shocks
IMF paper examines impact of financial crisis on US state finances
Working paper studies effect of balanced budget rules at US state level; finds pro-cyclicality but suggests this could be mitigated without changing the rules
Bundesbank paper studies changes in European monetary transmission
Discussion paper considers effect of financial crisis on transmission of European Central Bank monetary policy; finds decrease in sensitivity of Euribor to changes in central bank rates
ECB paper analyses risk-sharing in emerging markets
Working paper finds evidence of pro-cyclicality of capital gains on domestic stock markets; argues countries can hedge against risk by encouraging foreign investment
IMF paper assesses macro-prudential models in Latin America
Working paper evaluates two major Latin American policy models, one of institutional separation and one of integration; suggests areas for improvement in both models