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.
The Missing Profits of Nations and Multinationals’ Extreme Profitability in Tax Havens
The economics of tax evasion is a growing field in academic economics. There are much new exciting research trying to understand the mechanism behind global tax evasion. "The Missing Profits of Nations” by Thomas R. Tørsløv, Ludvig S. Wier and Gabriel Zucman is one of the most noteworthy research on the dynamic behind global tax evasions.
The problem with monetarist’s view of inflation
Long-run stability of the velocity, or the filpside of it, money demand, however, is not a empirically founded assumption.
Shadow Fed Chair — and Powell’s nuclear option to counter it
President Trump's plan to install a "Shadow Chair" months before Jerome Powell's term ends will definitely reshape US monetary policy — but it could face a surprising challenge from Powell himself.
Early signs of inflation expectation de-anchoring back in 2021
Ricardo Reis, economics professor at the London School of Economics, explained that there were telling signs that the increase in cost of living started ealry-2021 was not a "transitory" phenomenon.
Macroprudential Policy – how does it differ from rate hikes?
Macroprudential policies, it is argued, are more targeted and can complement central bank’s use of interest rate policy.
Why the Fed’s Standing Repo Facility Isn’t for Daily Use: An Explainer
"The [Standing Repo Facility (SRF)] rate is set at the top of the FOMC’s target range for the federal funds rate. This combination of an ample supply of reserves and an SRF rate at the top of the target range reduces the day-to-day reliance on the facility except during periods of significant upward pressure on rates resulting from strong liquidity demand or market stress," said John Williams
Measuring Federal Reserve officials’ secret disagreement behind locked doors of FOMC meetings
Dissent votes in Federal Reserve policy meetings are rare, accounting for only 6.37% of the votes between 1976 and 2017. However, opting not to vote against the FOMC consensus doesn't necessarily mean committee members don't "disagree" with it.
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.
Hong Kong dollar amid ‘Asian Financial Crisis in reverse’ — basic explainer
An explainer on how Hong Kong Linked Exchange Rate System works, what Aggregate Balance is, and how interest rate arbitrage help maintains Linked Exchange Rate System.
