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.
The Non‐Bank Credit Cycle
In a new working paper "The Non‐Bank Credit Cycle", researchers Esti Kemp, René van Stralen, Alexandros Vardoulakis, and Peter Wierts tried to look into the cyclical properties of non‐bank credit and its relevance for financial stability.
Hong Kong Linked Exchange Rate & HKD-USD interest rate differential
HKD tends to be on the strong side (closer to HKD 7.75 per USD) when the interest rate differential is positive (HIBOR > LIBOR).
Planet Money Book—a long-time listener, first-time reader’s review
Planet Money Book is an excellent introduction to economics and finance and reminded me why it is good to have Planet Money in our life.
Reserve Management Purchases: The return of ‘non-QE’ asset purchases
Reserve Management Purchases (RMP) is a form of open market operations under which the Federal Reserve injects reserves into the banking system through "permanent" asset purchases with an aim to ensure the level of reserves remain "ample".
Interview with Paul Romer – On Charter Cities (and HK) and Growth Theory
"There is a big difference between saying you want to allow for city-scale reform zones that will encourage reform of government and innovation in government, and saying that you want to do away with government entirely and let a corporate entity run a private city," says Nobel winning economist Paul Romer.
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.
How often companies in Eurozone change their prices?
An ECB survey found that the retailers review and change their prices most often, while consumer and business service firms adjust their pricing the least often. Firms in the manufacturing sector, meanwhile, have a price adjustment frequency somewhere in between the above sectors
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.
A skeptical review of the QEs – why they might not be powerful as...
In their working paper "A Skeptical View of the Impact of the Fed's Balance Sheet," economists David Greenlaw, James D. Hamilton, Ethan Harris, and Kenneth D. West challenge some earlier studies that concluded QEs have a significant economic impact. Their major argument is that those research used simple event studies to quantify the impact of QE.
