Macroprudential policies, it is argued, are more targeted and can complement central bank’s use of interest rate policy.
George Akerlof explains how the Keynesian- neoclassical synthesis dominated the field, and what problems this dominance resulted.
In recent months, the Global Economic Policy Uncertainty index has risen to a level much higher than periods around the 911 Terrorist Attack or the 2008 Financial Crisis, hence the conclusion that the economic policy is unprecedently uncertain now.But here is why you might not have to worry.
HKD tends to be on the strong side (closer to HKD 7.75 per USD) when the interest rate differential is positive (HIBOR > LIBOR).
Federal Reserve announced yesterday that it will start purchasing Treasury bills from Oct 15 (Tuesday) until at least the second quarter of next year.
The floor system needs a cap on top of it. The sooner the Fed realizes it, the better they will be prepared for the coming financial turmoil.
In a recent research, four European Central Bank economists found that negative interest rate policy in the eurozone can encourage banks to increase lending and encourage cooperations to increase investments.That is, contrary to what macroeconomics models usually predict, interest rate policy can still has stimulative effect even the zero lower bound is reached.
If you think the interest rate gap between Hong Kong and US is a market phenomenon, think again. HK Monetary Authority has a much bigger role than you think