Economics

Long-run stability of the velocity, or the filpside of it, money demand, however, is not a empirically founded assumption.

Since the Euro crisis, investors and policymakers are well aware of the so-called "doom loop" between the banking system and the sovereign. That is, a crisis originating in the banking system (sovereign) will weaken the sovereign (banking system), which in turn will worsen the banking (sovereign) crisis itself. In a recent ECB discussion Paper "Managing the sovereign-bank nexus", the 7 economists - Giovanni Dell’Ariccia, Caio Ferreira, Nigel Jenkinson, Luc Laeven, Alberto Martin, Camelia Minoiu, and Alexander Popov - coauthored the paper suggested that the banks and sovereigns are linked by three interacting channels:

A standard perception of PPI is that it is a measure of "wholesale inflation", but the BLS told EconReporter that this interpretation of PPI is not at all correct.

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...

The Saturated Level of Reserves or efficient level of reserves, is the point which the opportunity cost for banks to hold reserves disappears, and became indifferent towards holding more reserves. The reserve demand curve beyond this point becomes close to horizontal.

Inflation projections by Fed officials show that PCE inflation will not reach 2% by the end of 2025. Why the Fed expects to cut rate next year then?

What if I tell you, behind the boring news headline, there is actually a wonkish story about how the Hong Kong central bank took advantage of the monetary easing by the Fed in the last 12 year and created a new set of policy options that it can now use to actively mange the inflows created by the new round Fed easing under the Great Lockdown.

Macroprudential policies, it is argued, are more targeted and can complement central bank’s use of interest rate policy.

Welcome! This is the first installment of our interview series "Where is the General Theory of the 21st Century?" "Where is the General Theory of...

The Fed is currently in a "wait and see" mode in deciding what is the reaction to Trump's trade policy. But is it possible for the Fed to be a bit more proactive than merely saying "we will be able to update you further when we know more details"? Enters scenario analysis.