No Image

Macroeconomic Effects of China’s Financial Policies

November 12, 2018 Bilal 0

Macroeconomic Effects of China’s Financial Policies https://ift.tt/2JQtr45 Macroeconomic Effects of China’s Financial Policies NBER Working Paper No. 25222 Issued in November 2018 NBER Program(s):Development Economics, Economic Fluctuations and Growth, Monetary Economics The Chinese economy has undergone three major phases: the 1978-1997 period marked as the SOE-led economy, the 1998-2015 phase as the investment-driven economy, and the new normal economy since 2016. All three economies have been shaped by the government’s financial policies, defined as a set of credit policy, monetary policy, and regulatory policy. We analyze the macroeconomic effects of these financial policies throughout the three phases and provide the […]

No Image

The Expansionary Lower Bound: Contractionary Monetary Easing and the Trilemma

November 12, 2018 Bilal 0

The Expansionary Lower Bound: Contractionary Monetary Easing and the Trilemma https://ift.tt/2JzTsVk The Expansionary Lower Bound: Contractionary Monetary Easing and the Trilemma Author/Editor: Paolo Cavallino ; Damiano Sandri Publication Date: November 2, 2018 Electronic Access: Free Full Text. Use the free Adobe Acrobat Reader to view this PDF file Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management. Summary: We provide […]

No Image

The effectiveness of large-scale asset purchases

October 16, 2018 Bilal 0

The effectiveness of large-scale asset purchases https://ift.tt/2Eeb89V Central banks in the US, Europe, and Japan purchased many trillions of dollars of assets in an effort to hold down their interest rates and stimulate their economies. The Fed described these operations as ‘large-scale asset purchases’, and they were often referred to in the business press as ‘quantitative easing’ (QE). In the US, asset purchases were implemented in three phases between 2009 and 2014, commonly labelled QE1, QE2, and QE3. What did these purchases accomplish? Figure 1 Federal Reserve holdings of securities, 19 November 2008 to 27 December 2017 Notes: Sum of Federal […]

No Image

InoueRossiRevised2018.pdf

September 19, 2018 Bilal 0

InoueRossiRevised2018.pdf https://ift.tt/2PS8qbb Publish via Google Docs September 19, 2018 at 08:30PM https://ift.tt/2PS8qbb

No Image

Finance and Econ From the Web: Night lights measure growth, why are rates so low, are bankers liberals or conservatives….

September 19, 2018 Bilal 0

I thought I’d have a separate “Best Of the Web” devoted to economics and finance. Below I’ve found 30 articles and academic papers on macro and finance. Some are easy reads and others are denser, but I’ve summarised each one. Oh, if you come across anything interesting that I’ve  missed, then flag it to me and I’ll include it in my next list.  Enjoy! North and South Korea at night , 1992 vs 2008

No Image

Monetary Policy and Superstar Firms

September 5, 2018 Bilal 0

Monetary Policy and Superstar Firms https://ift.tt/2CenRbu The yearly Jackson Hole gathering of central bankers has focused this year on the topic of changing market structure, the rise of superstar firms, and the implications of the way they compete for central banks. Last year, David Autor et al. suggested a new interpretation of the fall in the labour share based on the rise of “superstar firms.” If globalisation or technological changes give an advantage to the most productive firms in each industry, product market concentration will rise as industries become increasingly dominated by superstar firms with high profits and a low share of […]

No Image

Discouraging Deviant Behavior in Monetary Economics — by Lawrence Christiano, Yuta Takahashi

September 4, 2018 Bilal 0

Discouraging Deviant Behavior in Monetary Economics — by Lawrence Christiano, Yuta Takahashi https://ift.tt/2NGs5Kw Discouraging Deviant Behavior in Monetary Economics NBER Working Paper No. 24949 Issued in August 2018 NBER Program(s):Economic Fluctuations and Growth We consider a model in which monetary policy is governed by a Taylor rule. The model has a unique equilibrium near the steady state, but also has other equilibria. The introduction of a particular escape clause into monetary policy works like the Taylor principle to exclude the other equilibria. We reconcile our finding about the escape clause with the sharply different conclusion reached in Cochrane (2011). Atkeson […]

No Image

Tate Lacey sees hints of NGDP targeting in Powell’s remarks – Econlib

September 3, 2018 Bilal 0

Tate Lacey sees hints of NGDP targeting in Powell’s remarks – Econlib https://ift.tt/2wveqzc Tate Lacey of the Cato Institute has an interesting post discussing Jerome Powell’s recent Jackson Hole speech on monetary policy: Powell constructed his remarks around a nautical metaphor of “shifting stars.” In macroeconomic equations a variable has a star superscript (*) on it to indicate it is a fundamental structural feature of the economy. In Powell’s words, these starred values in conventional economic models are the “normal, or “natural,” or “desired” values (e.g. u* for the natural rate of unemployment, r* for the neutral rate of interest, […]

No Image

The natural yield curve: its concept and developments in Japan (2015)

September 2, 2018 Bilal 0

https://www.boj.or.jp/en/research/wps_rev/lab/lab15e03.htm/ Recent monetary policies aiming to influence the entire yield curve have come to play a more prominent role in advanced economies as there has been little room for further lowering the short-term interest rate. This means that the effects of monetary easing cannot be fully captured by the single gap between the actual real short-term rate of interest and the corresponding natural rate of interest. This article proposes the concept of the natural yield curve, which extends the idea of the natural rate of interest defined at a specific maturity to one defined for all maturities. The gap between […]

No Image

Monetary Policy and the Stock Market: Time-Series Evidence (2016)

September 2, 2018 Bilal 0

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2748290 Abstract We construct a slope factor from changes in federal funds futures of different horizons. Slope predicts stock returns at the weekly frequency: faster monetary policy easing positively predicts excess returns. Investors can achieve increases in weekly Sharpe ratios of 20% conditioning on the slope factor. The tone of speeches by the FOMC chair correlates with the slope factor. Slope predicts changes in future interest rates and forecast revisions of professional forecasters. Our findings show that the path of future interest rates matters for asset prices, and monetary policy affects asset prices throughout the year and not only at […]