Zero lower bound
IMF paper proposes cash-based solution to zero lower bound
“Decoupling” cash from electronic money could be an alternative to QE or a higher inflation target, the authors say
BIS paper outlines lower-bound risk model
Model estimates probability of hitting ELB, helping to guide policy
ZLB increases equities-oil correlation – St Louis Fed research
The assets were uncorrelated until late 2008, when Fed took federal funds rate to zero
Denomination matters for banknote demand – paper
Bank of Canada paper finds people make different choices when holding high-value banknotes
Andreas Dombret on ECB policy, deposit insurance and Basel III
The Deutsche Bundesbank executive board member speaks about exiting QE, the viability of European deposit insurance, the German banking system and doing a deal on Basel III
NY Fed paper studies when government should issue safe assets
Model implies only under certain situations should the government issue new debt; changing inflation target might be superior
Fed should review monetary policy framework – Mester
Several FOMC members raised policy review at January meeting, Cleveland Fed president says
Central bank of the year: Bank of Canada
The Canadian central bank has stood out for its ever-improving levels of transparency, forward-looking management and best-practice review of its policy mandate
BoE economist explores ‘active’ QE model
Quantitative easing could be made a more conventional part of central bank toolkits, used to help support spending and inflation, says Harrison
Ultra-low rates hampered productivity in US, researchers find
A slower pace of policy normalisation can help boost productivity and growth
Unconventional policy driving crypto bubble, BNPP economist argues
Cryptocurrencies have the potential to deliver “large, positive returns” in an environment stifled by negative real rates
Fed’s Williams proposes new tools to deal with future crisis
Structural factors beyond central banks’ control keep natural rate of interest lower
Forward guidance essential in times of stress – Fed’s Evans
Chicago Fed president says central banks should plan for inevitable future scenarios now, in order to best prepare the public and to ensure policies are understood
Fiscal policy shocks amplified by accommodative monetary policy – paper
IMF research analyses impact of government spending spillovers, noting effects are amplified in countries with interest rates near the lower bound
John Williams on the neutral rate of interest and mandate change
The president of the Federal Reserve Bank of San Francisco speaks about the plunge in the natural rate of interest, and why it means central banks should work together to review their price stability targets
Czech exchange rate floor helped fight deflation – IMF paper
Range of methods imply the exchange rate floor was an effective measure, having been employed after hitting the zero lower bound
Canadian deputy: inflation target renewal aids policymaking
A renewal period offers the bank a research opportunity to examine monetary policy framework; such research prompted a decision to maintain inflation target at 2%
Fed paper studies how to tackle the lower bound
Simple policy rules lead to inflation falling “systematically” short of 2% target; pursuing higher inflation may help but comes at a cost
IMF deems negative rates to have had ‘no major side effects’
IMF paper explores the impact of negative interest rates on bank behaviour, concluding the transmission to money markets and bond yields has worked well
Former central bank governors debate unconventional monetary policy
Trichet, Shirakawa and Weber agree unconventional tools may have outstayed their welcome; costs of tools used during the crisis will not be known for some time, Weber says
Central banks should test robustness of their main macro models – paper
Bank of Canada paper says users of large-scale macroeconomic models should develop tools to assess whether non-linearities could be distorting results
RBNZ’s Krippner: term structure models can make for better policy
Central bank economist talks about his work on modelling monetary policy at the zero lower bound, and what comes next
Lower rates link to higher exchange rate impact – BIS paper
Working paper finds monetary policy’s impact on the exchange rate has grown as rates have fallen
Economics in central banking: Leo Krippner
His work on term structure modelling has helped central bank policy-makers to track the effects of unconventional policies and it raises many interesting possibilities for future research