As the US economy recovers in fits and starts, market and policymaker attention is turning to the exit strategy. How will the Fed exit from its loose monetary policy? In particular, how will it winding down its second bout of quantitative easing, known universally as QE2?
How inertial is monetary policy? Implications for the Fed’s exit strategy
Yuriy Gorodnichenko, Olivier Coibion, 28 January 2011
Liquidity in the financial crisis: New insights on the lender of last resort
Pierre-Olivier Weill, Guillaume Rocheteau, Ricardo Lagos, 16 December 2009
Under every central banker’s bed is a copy of “Lombard Street” by Walter Bagehot. Published in 1873, it argues that the central bank should act as a lender of last resort during crises to ensure that financial intermediaries have the resources to provide liquidity in asset markets.
The wonderful world of negative nominal interest rates, again
Willem Buiter, 4 June 2009
I was in Frankfurt at the European Central Bank recently to meet people and give a presentation on negative nominal interest rates (the “zero lower bound problem”). For reasons I don’t understand, this topic generates almost as much heat and emotion as a critical piece on Obama.
Financial crisis resolution: It’s all about burden-sharing
Charles Wyplosz, 20 July 2008
An old and familiar debate is back. Should taxpayers bail out the US banking system, quite possibly the British and European ones as well?
There are two standard views on the multi-trillion dollar question of who pays for getting us out of the financial crisis
Why central banking is no longer boring
Guido Tabellini, 23 June 2008
Until a year ago, central bankers could boast with satisfaction that monetary policy had become boring. A widely shared “best practice” was followed by almost all central banks. Any controversies concerned technical nuances that were really only relevant to professionals in the field. Then came the credit crisis – and all certainties went out the window.
Why does the spread between LIBOR and expected future policy rates persist, and should central banks do something about it?
Francesco Giavazzi, 2 June 2008
For a few months now the markets have been concerned by the persistence of a spread between the 1- and 3-month LIBOR (“London Interbank Offer Rate” – the interest rate at which banks lend money to each other without posting collateral) and the comparable overnight index swap rates (OIS), i.e. future expected policy rates (the Federal Funds rate in the U.S.
Monetary policy and commodity prices
Jeffrey Frankel, 29 May 2008
In a speech delivered last week, Federal Reserve Vice Chairman Donald L. Kohn addressed a theory to which I am partial: the theory that low real interest rates have contributed to the continued rise in prices of agricultural and mineral commodities, including oil, over the last year. He said:
Let form follow function: In defence of central bank independence
Michael J. Orlando, 24 May 2008
As the effects of the subprime lending (or borrowing, as you prefer) binge continue to wear on the U.S. economy, politicians have reacted with a questionable set of proposals to ease the pain: from adjustable rate freezes to builder subsidies to liquidity access for lenders, it appears that no idea is beyond consideration.
Buiter’s warning: Who is the recapitaliser of last resort for the ECB?
Richard Baldwin, 8 May 2010
The Fed, Bank of England and ECB have recently loaned money to banks against collateral that is riskier than usual – including mortgage-backed securities that are at the heart of the current crisis. Since some of these loans could go bad, questions arise: Can the central bank go broke? Who would recapitalise it if it did?
Federal Reserve policy responses to the crisis of 2007-08: A summary
Stephen Cecchetti, 10 April 2008
Central bankers are conservative people. They take great care in implementing policy; they speak precisely; they explain changes completely; and they study the environment trying to pinpoint where the next disaster looms. Good monetary policy is marked by its predictability, but when the world changes, policymakers change with it.
- A tale of two depressions: What do the new data tell us? February 2010 updateEichengreen, O’Rourke
- The ECB’s stealth bailoutSinn
- Educated in America: College graduates and high school dropoutsHeckman, LaFontaine
- Eurozone breakup would trigger the mother of all financial crisesEichengreen
- Panic-driven austerity in the Eurozone and its implicationsDe Grauwe, Ji
Adelman, 28 October 2013
Reichlin, Giugliano, 7 November 2013
Holmes, McGrattan, Prescott
Beck, De Haas, Ongena
CEPR Policy Research
- The buyer margins of firms' exportsCarballo, Ottaviano, Volpe
- Commodity and Equity Markets: Some Stylized Facts from a Copula ApproachDelatte, Lopez
- Ethnic Unemployment Rates and Frictional MarketsGobillon, Rupert, Wasmer
- Finance and Poverty: Evidence from IndiaAyyagari, Beck, Hoseini
- The Manipulation of Basel Risk-WeightsMariathasan, Merrouche