Economics

The Fed has changed it interest rate policy regime since 2008, from the so-called Corridor system, to the Floor system it is using right now. What is the different?

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.

A new working paper from the IMF which tries to assess the impact of media sentiment on equity markets.

This week, the trio who was directly responsible for the decision to let Lehman fail – Bernanke, Tim Geithner (then New York Fed President), and Hank Paulson (then Treasury Secretary) – joined together at a panel held by Brookings Institution and spoke about the lessons they had learned from the crisis.

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 money helicopter has arrived,” Claire Jones writes in her FT Alphaville post, citing Hong Kong Finance Secretary’s announcement of a handout of HKD...

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.

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.

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

The Bank of England on Thursday released its latest Monetary Policy Report, announcing its decision to lower its policy rate by 25 bps to 4%. The report contains a lot of excellent analysis, including on the recent rise in food prices, the effect of trade war as well as a review of its quantitative tightening policy. But one thing, a comparatively much less important thing, in the review just stuck in my mind...