A Pitfall of Global Economic Policy Uncertainty Index
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.
Is there a Zero Lower Bound?
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.
Fed’s swap lines help easing Covid-era global dollar shortage
Countries with swap line arrangement with Federal Reserve, be it the standing ones or temporary, saw smaller increases in spread during the initial pandemic stress period.
Hysteresis – An Underrated Macroeconomics Question
Hysteresis is referred to the hypothesis that recessions may have permanent effects on the level of output relative to trend.
BIS’s latest hunt for Zombie (firms)
In the latest BIS Quarterly Review, researchers Ryan Banerjee and Boris Hofmann consolidated some of the earlier research to illustrate the problem of zombie firms. They argued that the rise of zombies predated the 2008 financial crisis, and has since been dragging down the productivity of the real economy.
What comes after housing market bubble?
An investigation into the probability of a crash in house prices following a housing bubble
Why is the Hong Kong-US interest rate spread so persistent? — Currency peg in...
A spread of over 3.5 percentage points between US and Hong Kong Interest rate persisted for close to two months and so far arbitrage has failed to close the gap, leading to discussion of whether Hong Kong's Linked Exchange System is failing. This article, however, will explore some technical factors behind this interesting interest rate gap.
Aging, Output Per Capita and Secular Stagnation
Gauti B. Eggertsson, Manuel Lancastre, and Lawrence H. Summers explain in their paper "Aging, Output Per Capita and Secular Stagnation" the role of aging in the Secular Stagnation model.
When will Hong Kong’s Interest Rates Align With the US?
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
Blanchard’s “Policy Model” v “Theory Model”
Back in November last year, Professor Olivier Blanchard discussed with me about his view that there should be four types of macroeconomics, and "theory...
