Forward guidance in the UK

Spencer Dale, James Talbot 13 September 2013

a

A

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.

a

A

Topics:  Monetary policy

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

Eurozone recovery: there are no shortcuts

Roberto Perotti 13 September 2014

a

A

The consensus is increasing that austerity has not worked – Europe stands on the edge of deflation and suffers from a deficit of demand. A recent VoxEU proposal (Giavazzi and Tabellini 2014) offers a solution that is widely shared on both sides of the Atlantic – all Eurozone countries should cut taxes simultaneously by 5% of GDP, and the ECB should buy the extra debt without sterilisation. This should be accompanied by a credible plan to reduce government spending in the future.

a

A

Topics:  Macroeconomic policy Monetary policy

Tags:  austerity, eurozone, monetary policy, helicopter money, quantitative easing, QE, stimulus, fiscal consolidation, fiscal policy, spending cuts, fiscal sustainability, debt monetisation

Is the ECB doing QE?

Charles Wyplosz 12 September 2014

a

A

The 4 September announcement by Chairman Mario Draghi has been greeted with enthusiasm by the markets and the media. It has been long awaited, and many believe that the ECB has finally delivered. This is not sure. The ECB intends to buy large amounts of securities backed by bank lending to households (mortgages) and to firms.

a

A

Topics:  Exchange rates Financial markets Monetary policy

Tags:  quantitative easing, QE, monetary policy, unconventional monetary policy, ECB, securitisation, bank lending, Europe, eurozone, Subprime, stress tests, deleveraging, recapitalisation, depreciation, exchange rates, euro, central banking

Quantifying the macroeconomic effects of large-scale asset purchases

Karl Walentin 11 September 2014

a

A

Central banks have used various unconventional monetary policy tools since the onset of the financial crisis yet the debate continues regarding their efficiency. This column attempts to shed light on the ‘bang for the buck’, or the macroeconomic effects, of one such unconventional monetary policy – the Federal Reserve’s large-scale asset purchases of mortgage-backed securities employed during the Fed’s QE1 and QE3 programs.

a

A

Topics:  Global crisis Monetary policy

Tags:  monetary policy, unconventional monetary policy, large-scale asset purchases, central banking, financial crisis, Federal Reserve, quantitative easing, mortgage-backed securities, term premia, zero lower bound, interest rates, US, UK, Sweden, mortgages, global crisis

How to jumpstart the Eurozone economy

Francesco Giavazzi, Guido Tabellini 21 August 2014

a

A

The mantra is that once again it is up to the ECB to save the Eurozone. Quantitative easing is the last policy tool available to jumpstart the Eurozone economy. The longer the ECB waits before starting to buy government bonds, the further away will the recovery be. This analysis, however, overestimates the power of monetary policy.

a

A

Topics:  Europe's nations and regions Macroeconomic policy

Tags:  ECB, monetary policy, fiscal policy, quantitative easing, public debt, aggregate demand, Eurozone economy, stagnation

Identifying and quantifying monetary policy transmission through bank balance sheets

Kaoru Hosono, Daisuke Miyakawa 09 August 2014

a

A

How does monetary policy affect firm activities? While there is long-standing literature on this issue, the transmission mechanism of monetary policy is currently attracting renewed attention. The reason is that many central banks – including the US Federal Reserve, the Bank of England, the ECB, and the Bank of Japan – have introduced unconventional monetary policies such as quantitative easing and credit easing in the wake of the Global Crisis, and sooner or later will have to exit from these policies.

a

A

Topics:  Financial markets Global crisis Monetary policy

Tags:  monetary policy, Japan, global crisis, quantitative easing, unconventional monetary policy, balance sheets, financial accelerator, credit easing, bank lending channel

Will the US inflate away its public debt?

Ricardo Reis, Jens Hilscher, Alon Raviv 07 August 2014

a

A

Should the US Federal Reserve raise the inflation target from its current level of 2%? And will it? One benefit would be to make hitting the zero lower bound less likely, which would lead to less severe recessions, as Olivier Blanchard, Giovanni Dell’Ariccia, and Paolo Mauro (2010), Daniel Leigh (2010), and Laurence Ball (2013) have argued on this website.

a

A

Topics:  Macroeconomic policy

Tags:  inflation, monetary policy, public debt, seignorage

Revisiting the pain in Spain

Paul De Grauwe 07 July 2014

a

A

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).

a

A

Topics:  Europe's nations and regions Global crisis Macroeconomic policy

Tags:  ECB, monetary policy, euro, EMU, Spain, monetary union, fiscal policy, UK, government debt, austerity, EZ crisis, Outright Monetary Transactions, currency depreciation

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

Eric Monnet 05 July 2014

a

A

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). In fact, quantitative controls – especially credit controls – have been used as primary tools of monetary policy for decades in western Europe and east Asia, usually during periods when these countries were experiencing their highest ever rates of growth. Many countries, including Brazil, India, and China, still use them today.

a

A

Topics:  Europe's nations and regions Monetary policy

Tags:  France, monetary policy, credit controls

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

Claudio Borio, Piti Disyatat 25 June 2014

a

A

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).

a

A

Topics:  Financial markets Global crisis Monetary policy

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

Pages

Events