Economics

In the interview, Ricardo Reis discuss with us his latest research project - "Reservism", the study of the role of reserves on central bank balance sheets and their implications for central bank solvency, quantitative easing, and the ability to control inflation.

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...

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.

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...

Raghuram Rajan, former Governer of Reserve Bank of India and now Professor of Finance at Chicago Booth, visited Hong Kong and gave a keynote speech in Asian Financial Forum last week. I am lucky...

Peter Praet, Executive Board Member of the ECB:Central to this debate is whether the slow growth can be attributed to cyclical – and hence ultimately transitory – factors related to the financial crisis,...

Back in November last year, Professor Olivier Blanchard discussed with me about his view that there should be four types of macroeconomics, and "theory models" like DSGEs is just one of them. Here is...

Ben Bernanke has a new blog post on Brookings. The focus of the post is to explain "the large difference between the reactions of the Fed and the markets to the change in fiscal prospects since the election"

Hysteresis is referred to the hypothesis that recessions may have permanent effects on the level of output relative to trend.

DSGE is a methodology for a wide range of macroeconomics models. One of the most common formulations is the so-called New Keynesian model. New Keynesian economics can be interpreted as an effort to combine the methodological tools developed by real business cycle theory with some of the central tenets of Keynesian economics tracing back to Keynes’ own General Theory.