Research
BoJ economists shed light on quality-price dynamics
Study of large database of prices shows how firms take advantage of new product launches to raise prices partly due to higher quality and partly to maintain profits
LatAm policy-makers were possibly ‘excessively optimistic’ over economic potential, BIS paper says
Downplaying commodity super-cycle may have led to incorrect assessment of economic potential in Latin America, paper says; may have skewed monetary and fiscal policies
Shocks to bank finance hit exports, Bank of Italy paper argues
Exporters and non-exporters react differently to bank credit shocks, a Bank of Italy working paper argues; researchers present ‘unique firm-bank matched database’ for Italian businesses
Measures needed to keep married women in wage sector in Sub-Saharan Africa, paper finds
Working paper examines gender gap in labour markets in Burkina Faso, Ghana, Mauritius, Rwanda and Zambia; finds education opens opportunities, but they can diminish after marriage
Liikanen calls for more macroprudential tools in Finland
Bank of Finland governor says new tools should be provided before there is a need to use them; warns of risks associated with growing debt-to-income ratios alongside weaker long-term growth
IMF paper points to short-term benefits of product market reforms
Authors find product market reforms can deliver benefits in short term as well as long, though effects may be curtailed where credit is constrained
Micro factors affect Italian banks’ sovereign debt purchases, paper argues
Italian banks’ sovereign debt purchases strongly affected by their balance sheet needs, Bank of Italy researchers argue; size of bank a key factor
Low rates driving up housing share of income – RBA paper
Share of aggregate US income from capital is on the rise, and housing accounts for a large portion; low nominal rates explain strong demand for housing, economist argues
Chile expands dollar holdings, central bank annual report shows
Central Bank of Chile reserve allocations in euro, Canadian dollar and Australian dollar fall, as dollar holdings rise
Japanese inflation target a partial success – Fed paper
Authors show adopting inflation target during a liquidity trap can have powerful effects, but in the Japanese case it seems to have been weakened by other factors
ECB paper considers impact of loss in collateral value
Research examines how a loss in value will impact the wider economy by studying the effects of a legal reform in Sweden in 2004; sees potential for ‘negative consequences’
External factors most important inflation driver, Mauritius survey shows
Inflation expectation shows 71% of stakeholders asked believe external environment is most important factor in inflation pattern; exchange rate viewed as second most important
Strong anti-inflationary monetary policy helps mitigate uncertainty shocks, Italian paper says
Central bank has better chance of mitigating uncertainty-driven recessions by following Taylor rule with high weight on inflation, paper finds
ECB paper considers impact of banking shocks on Portugal
Researchers examine impact of different types of credit supply shock on the Portuguese economy from 2005 to 2013; shocks to large banks may have had large impact on total investment
Hitting inflation targets may be harder now, thanks to lower bound – paper
Working paper warns of potential for lower bound episodes to affect expectations of when they will occur in future, something that can act as a drag on inflation in the present
ECB papers take detailed look at bond market data
Two papers from the European Central Bank take a detailed look at data on the development of credit spreads in eurozone corporate bonds
Norges Bank paper offers insights on when to ‘lean against the wind’
Norges Bank working paper investigates the extent monetary policies should actively aim at mitigating the build-up of financial imbalances; using rates to curb credit growth could lower output
BIS paper: money growth-inflation link weakens, credit link grows
Authors find money growth is less important in driving price changes, but credit growth is becoming a more critical factor in financial crises
Slow growth need not be the ‘new normal’ – Richmond Fed paper
Authors give reasons for optimism about the future of US economic growth, and outline policies that could support it, although most are outside the control of the central bank
Financial crises raise transmission of US spillovers to Latin America – paper
Central Bank of Colombia paper shows Brazil is a “net transmitter” of volatility; transmission of spillovers increases in times of political and financial uncertainty
Structural funding ratios could have helped detect failing banks – BoE working paper
Bank of England working paper reveals structural funding ratios could have helped detect which banks were likely to fail in the 2008 crisis; wholesale funding structures most prone to failure
Eurobonds could be double-edged sword, researchers say
Banque de France researchers propose a new model of banks’ holdings of own-country sovereign debt; high holdings deter moral hazard but may exacerbate crises, they say
Pursuing stable rates may create instability, Norges Bank paper finds
Preference among central bankers to keep rates at “normal” levels may prove time-inconsistent, researchers warn
BoE paper explores impact of climate-change policies on central bank objectives
Unexpected tightening of carbon-emission policy could generate "significant" balance-sheet losses, paper says; transparency is key to maintaining financial stability