What is Payment on Reserves Process?
The payment on reserve process proposed by Robert Hall and Ricardo Reis is a way of remunerating reserves which would give the central bank better control over the price level.The basic intuition is that...
Most of China’s Foreign Currency Credit are in USD
According to the data from BIS global liquidity indicators, as of September 2018, most foreign currency credits to China is still denominated with US dollar.
Debt Growth Rate, not Level, Predicts Slowdown
Last week, Bank of England's Deputy Governor for Monetary Policy Ben Broadbent gave an insightful speech about debt dynamics.An important point Broadbent has illustrated is that a high absolute level of debt is...
FedSpeak Might Not Have Much Effects on Public’s Inflation Expectation
In a recent NBER working paper "Monetary Policy Communications and their Effects on Household Inflation Expectations", economists Olivier Coibion, Yuriy Gorodnichenko and Michael Weber tried to find out how the household's expectation for inflation change with regard to the information they received.
Central Bank’s Balance Sheet and the Rise of Reserves
The above figure shows the balance sheet of four major central banks from 2005 to 2015. Above the horizontal axis is the asset side of the balance sheet, below is the liability side. All...
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.
What Macroeconomists seems to agree with each others… according to Blanchard
After a round of hot debate on the problem of DSGE model and the trouble of macroeconomics initiated by Paul Romer, heavyweight macroeconomist Olivier Blanchard comment on the usefulness of DSGE model, again.[getty...
CoCo issuance and bank fragility
A series of papers by Stefan Avdjiev, Bilyana Bogdanova, Patrick Bolton, Wei Jiang, and Anastasia Kartasheva on this topic is highly recommended.
Crashes and Rebounds in Housing Markets
The focus of the research is to find out if there is any "predictable" pattern following housing "bubbles".
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.