Recession
Larry Summers on stagflation risks, lessons from Delphi and never-ending ‘punch’
The former US Treasury secretary speaks about fiscal ‘overexpansion’, Fed/Treasury debt discord, the pitfalls of ‘unknown unknowns’ and central bankers ‘unable’ to remove the ‘punchbowl’
Yellen warns of ‘catastrophic’ effects of not raising debt limit
Treasury secretary says failing to raise ceiling would be a “manufactured crisis”
NPLs down in nearly 70% of jurisdictions, despite Covid-19
Lower income nations hit harder than most during past five years; Asia, Africa and Americas NPLs on different trajectory to Europe
Bank of Zambia governor resigns
Mvunga leaves following change in presidents, amid high inflation
Some philosophical questions about the future of central banking
Kenneth Rogoff weighs up the many challenges facing central banks in the years ahead, from debt and inflation to negative rates and the dangers of ‘mission creep’
Seychelles central bank cuts policy rate by 100 basis points
Central bank considers weak economy more a concern than high inflation
BoE paper models impact of ‘active’ fiscal policy
Active fiscal policy complicates monetary policy but can generate higher welfare, author says
Kuwait dispute leaves SWF without managing director or full board
Fiscal battle between monarch and parliament keeps top positions at sovereign wealth fund vacant
Peru’s likely president-elect will reappoint Velarde
As opponent disputes his narrow win, Castillo affirms role of long-serving governor
UK household debt has not yet amplified Covid shock – BoE paper
But the share of households reporting financial difficulties is now rising, authors note
Angola grants central bank independence
Constitutional amendment will guarantee autonomy and add financial stability to mandate
Charles Goodhart on inflation targets, financial stability and the role of money
The LSE professor says inflation targets should have been 0%, the Fed’s move to AIT is a mistake, independence is under threat from inflation, big balance sheets support liquidity, AI can help supervisors and climate stress tests are unconvincing
A return of the inflation monster?
There are fears that a shift in intellectual approach towards running economies ‘hot’ could herald a return of the money-eating inflation era
Tunisian governor warns IMF aid is needed to stop ‘explosion’
Abassi tells lawmakers to accept tough reforms or face “Venezuelan scenario”
US imposes sanctions on Myanmar central bank governor
Treasury targets new slate of senior officials in military regime
Armenia central bank raises policy rate 50bp
Inflation forces rate hike, matching moves by other former Soviet republics
Georgia central bank raises policy rate despite recession
Authorities hike rates, citing rising inflation, amid high unemployment and political turmoil
Governor of the year: Alejandro Díaz de León
Díaz de León has upheld the authority, integrity and independence of the Bank of Mexico against significant external and internal pressures
The untapped potential of transaction data
Covid-19 has highlighted the need for central banks to have more timely information, questioning whether high-frequency indicators are being used to their full potential.
Paper finds little evidence of long-term scarring
Richmond Fed research finds short-term demand shocks rarely create hysteresis
Macro-prudential policies cut liquidity trap risk – ECB paper
Fall in systematic risk boosts natural interest rate and reduces intensity of liquidity traps, paper finds
Whither the age of ‘magic money’?
EME central banks are more exposed to changes in geopolitics, climate, demography, technology and inflation at a time when monetary theory is running well behind central bank practice
Lagarde signals Covid-19 stimulus will remain active for longer
Asset purchases and bank lending programmes will be key ECB tools; rate cut not mentioned
Book notes: Austerity, by Alberto Alesina, Carlo Favero and Francesco Giavazzi
When it works and when it doesn’t; every chapter is thorough, informative and persuasive