Big thinking
Banxico paper probes forced labour’s lingering effects in Ecuador
High forced labour involvement is associated with decreased descendants’ income
Podcast: David Vines on how to reform the DSGE model
Oxford University’s David Vines believes the New Keynesian DSGE model is salvageable – but needs some serious work
Podcast: Canada’s Wilkins on fighting unconscious bias
Carolyn Wilkins on how the Bank of Canada has worked to improve its gender balance
Haldane envisages ‘iterative’ approach to advancing economics
Deductive and inductive approaches “need to share a broadly equal billing”, BoE chief economist says, setting out how the central bank has made use of big data
Veteran economists weigh in on ‘rebuilding’ macro theory
Economists including Olivier Blanchard, Andy Haldane and Simon Wren-Lewis tackle the question of how – and whether – to save the DSGE model
Google’s Hal Varian on how technology is changing economics
Google’s chief economist talks to Christopher Jeffery about how big data and machine learning are facilitating changes in economic thinking; discusses the impact technical breakthroughs may have for central banks
Big data in central banks: 2017 survey
As an active area for new projects, big data is becoming a fixture in policymaking, with an increasing number of central banks carving out a budget for data handling, writes Emma Glass.
BoE economists criticise DSGE inflation modelling
Team including MPC member Kristin Forbes criticises structural modelling approaches for failing to properly account for trend inflation
IMF economist builds agent-based banking system model
Model captures the diversity of agents and the use of rules of thumb; the author says the modular nature allows “straightforward” enhancements
Scrap micro-foundations to repair macroeconomics – Steve Keen
Professor says economy should be viewed as a dynamic system with credit playing a crucial role, arguing we should ditch models such as DSGE
Haldane hopeful for ‘rebirth’ of economics
BoE chief economist believes crisis for the profession could lead to a break with past thinking; offers solutions to productivity problems
BIS’s Shin links dollar strength to global malaise
Head of research outlines how dollar strength affects leverage globally, causing deviations from covered interest parity and potentially impacting growth and trade
Haldane turns to other disciplines to solve big economic questions
BoE chief economist calls for an interdisciplinary approach to tackling the problems economics faces in understanding complex systems; warns of shortcomings in micro-founded models
Climbing ‘Mount Economy’
The BIS’s quest for financial stability-oriented monetary policy throws up questions not only about decision-making but also how one should think about economics, as Claudio Borio explains
Helicopters bearing gifts
As QE and negative rates run out of room, helicopter money could be a last resort for overstretched central banks. But its detractors say the cost of its use could be very high
Yellen offers helicopter money cautious support
Fed chair says central banks could "legitimately consider" stimulus by financing government spending but only in "extreme" circumstances and with an eye on the many cases where it has gone wrong
Helicopter money still contentious as Borio enters debate
Article by Claudio Borio and others claims helicopter money means giving up on monetary policy for ever, but economists such as Adair Turner and John Muellbauer question the result
Riksbank’s Skingsley sees potential in helicopter money
Small, open economies will have limited room for manoeuvre if global real rates stay low, so central bankers should be willing to consider more radical options, deputy says
Ingves raises fundamental questions about central banking
Riksbank governor sets out questions around monetary policy and macro-prudential framework in Sweden, raising the prospect of a merger with the FSA and joining the SSM
Rajan offers solution to global policy spillovers
RBI governor sketches rating system designed to hold central banks to account; frank discussion may be enough, he says, but tougher rules in the style of Bretton Woods are also an option
Mervyn King calls for radical banking reform
Former Bank of England governor wants to curtail banks’ use of maturity transformation, putting the central bank’s lender-of-last-resort role at the heart of his new banking system