Forward guidance in the UK

Spencer Dale, James Talbot, 13 September 2013

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At its meeting on 1 August 2013, the Monetary Policy Committee (MPC) agreed to provide state-contingent forward guidance concerning the future conduct of monetary policy. The aim was to provide more information to help financial markets, households and businesses understand the conditions under which the current stance of monetary policy would be maintained.

Topics: Monetary policy
Tags: Bank of England, Central Banks, forward guidance, monetary policy

Revisiting the pain in Spain

Paul De Grauwe, 7 July 2014

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The different macroeconomic adjustment dynamics in Spain – a member of a monetary union – and the UK – a stand-alone country – is stark. Paul Krugman popularised this contrast in his New York Times blog with the title “The Pain in Spain” (Krugman 2009, 2011), and commented on my own analysis in De Grauwe (2011).

Topics: Europe's nations and regions, Global crisis, Macroeconomic policy
Tags: austerity, currency depreciation, ECB, EMU, euro, EZ crisis, fiscal policy, government debt, monetary policy, monetary union, Outright Monetary Transactions, Spain, UK

Monetary policy without interest rates: Evidence from France (1948 to 1973) using a narrative approach

Eric Monnet, 5 July 2014

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Recent central bank interventions following the Global Crisis have raised new interest in quantitative measures as instruments of monetary or macroprudential policy (Borio 2011, Galati and Moessner 2013).

Topics: Europe's nations and regions, Monetary policy
Tags: credit controls, France, monetary policy

Low interest rates and secular stagnation: Is debt a missing link?

Claudio Borio, Piti Disyatat, 25 June 2014

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Today, the US government can borrow for ten years at a fixed rate of around 2.5%. Adjusted for expected inflation, this translates into a real borrowing cost of under 0.5%. A year ago, real rates were actually negative. With low interest rates dominating the developed world, many worry that an era of secular stagnation has begun (Summers 2013).

Topics: Financial markets, Global crisis, Monetary policy
Tags: debt, global crisis, interest rates, monetary non-neutrality, monetary policy, natural rate of interest, risk-taking channel of monetary policy, secular stagnation

Repairing the transmission of monetary policy through asset-backed securitisation

Markus K Brunnermeier, Yuliy Sannikov, 3 June 2014

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Recent data show a decline in credit to small and medium-sized enterprise (SME) and private loans. Lack of credit growth to productive firms is one of the main obstacles to reignite the European growth engine.

Topics: Monetary policy
Tags: asset backed securities, financial stability, monetary policy, price stability, risk premia, securitisation

ECB: An appropriate monetary policy

Mickey Levy, 16 May 2014

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Europe’s modest economic recovery and uncomfortably low inflation put the ECB in a bind. Although economic conditions are improving gradually (European Commission 2014), concerns about the potentially negative impacts of deflation persist (Armstrong et al. 2014).

Topics: Monetary policy
Tags: bank lending, ECB, eurozone, monetary policy, quantitative easing

Why monetary policy matters: New UK narrative evidence

James Cloyne, Patrick Hürtgen, 15 May 2014

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In recent decades, central banks around the world have predominantly used interest rates as their main monetary policy instrument. And while the zero lower bound has necessitated a range of unconventional monetary policies, many central banks clearly still intend to use interest rates as their preferred tool as their economies recover.

Topics: Monetary policy
Tags: interest rates changes, monetary policy, UK

Tapering talk: The impact of expectations of reduced Federal Reserve security purchases on emerging markets

Barry Eichengreen, Poonam Gupta, 19 December 2013

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In May 2013, Federal Reserve officials first began to talk of the possibility of the US central bank tapering its securities purchases from $85 billion a month to something lower. A milestone to which many observers point is 22 May 2013, when Chairman Bernanke raised the possibility of tapering in his testimony to Congress.

Topics: Exchange rates, Monetary policy
Tags: capital controls, Capital inflows, currency war, emerging markets, exchange rates, Federal Reserve, Macroprudential policies, monetary policy, tapering

Monetary policy will never be the same

Olivier Blanchard, 27 November 2013

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Two weeks ago, the IMF organized a major research conference, in honour of Stanley Fischer, on lessons from the crisis. Here is my take. I shall focus on what I see as the lessons for monetary policy, but before I do this, let me mention two other important conclusions.

Topics: Monetary policy
Tags: global crisis, monetary policy

Economic uncertainty and the effectiveness of monetary policy

Knut Are Aastveit, Gisle James Natvik, Sergio Sola, 19 October 2013

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Since the onset of the “Great recession”, economists have struggled to explain why the recovery has been so slow, despite the many policy measures that have been passed to re-invigorate economic activity. One candidate explanation that several have pointed to, for instance Baker, Bloom, Davis and Van Reenen (2012), is economic uncertainty.

Topics: Monetary policy
Tags: Great Recession, monetary policy, uncertainty

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