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ECB caught up in economists’ spat

The European Central Bank has found itself caught in the crossfire of a battle raging between the world’s leading macroeconomists. The Bank for International Settlements’ call last month for the world’s central bankers to hurry up and raise interest rates has reignited the debate over how to explain – and tackle – the financial and economic turmoil that has persisted over the past six years. The debate is so fierce, the viewpoints so distinct, that two of the world’s leading multilateral...

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TLTRO: how well has the ECB targeted its loans?

The European Central Bank has revealed the details of arguably the most important element of the package of extraordinary monetary policy measures it unveiled last month to rid the eurozone of the threat of deflation. On Thursday, the ECB announced exactly how its targeted longer-term refinancing operation, or the TLTRO, will work. Earlier forward guidance that rates were likely to remain on hold until the end of 2016 was watered down by Mario Draghi, ECB president, possibly in the hope...

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Live blog: Mario Draghi’s monthly ECB press conference

This is the transcript of the Live Blog session ending at 14:54 on 3 Jul 2014. Despite inflation remaining extremely low across the eurozone and signs that the recovery is weaking in the single currency bloc, the European Central Bank kept its interest rates unchanged at its monthly meeting. Analysts are now looking for Mario Draghi’s assessment of the extraordinary measures introduced in June and details of any further measures.. By John Aglionby and Sarah O’Connor Hello and welcome....

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Japan’s inflation expectations: glass half empty?

“Inflation expectations appear to be rising on the whole.” Check out the last 11 policy statements from the Bank of Japan: you’ll find the same line, an upgrade from a milder assertion about “some indicators” last July. But according to the second round of the BoJ’s survey of companies’ expectations for price rises – the grand-sounding “inflation outlook of enterprises”, published on Wednesday – expectations are not rising. If anything, they’re falling. This was not supposed to happen. The...

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Carney’s (old) new normal

There are many uses of the phrase “new normal” in economics these days. Usually, it is used to signify lower growth or a different type of growth than in the pre-crisis period. Mark Carney went onto the radio this morning to talk about the “new normal” in monetary policy. Interest rates would be materially lower in future than the 5 per cent rate widely seen as normal before the crisis. The Bank of England governor’s words have been widely reported as a big new statement of policy. Is this a...

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ECB’s Cœuré backs student calls to overhaul economics curriculum

Last month, students from four continents joined forces to call for reform of the economics curriculum. In an open letter, the students said they wanted their courses to delve into a wider range of economics theories and methodologies than the standard neo-classical model that dominates undergraduate teaching, and to learn more about the implications of policy-making. Speaking to those students was a heartening experience – all of them struck me as extremely thoughtful and articulate. Their...

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Live blog: Bank of England financial stability report

This is the transcript of the Live Blog session ending at 11:56 on 26 Jun 2014. Mark Carney, the governor of the Bank of England, presented the Financial Policy Committee’s report on how it intends to keep the UK economy on an even keel. Most of the press conference was on what it intends to do about the booming housing market and which of its macro prudential tools it intends to use to cool it. By John Aglionby and Claer Barrett Good morning. Mark Carney’s press conference is about...

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Iraq’s economy in 5 charts

As Iraq appears to be descending into all-out sectarian war, the implications for the oil-dependent economy are huge. Iraq is Opec’s second-largest crude exporter, so markets are already feeling a little jittery, sending crude oil to its highest since September on Friday. Here are five charts showing how Iraq’s economy has developed since the 2003 US-led invasion of Iraq and where its vulnerabilities lie. 1. Oil production Oil output has recovered to levels not seen since the first Gulf...

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UK productivity puzzle: the Bank of England’s answers

Those hoping for a rapid pickup in UK productivity shouldn’t hold their breath. That’s the message from a new Bank of England paper which suggests the UK’s dismal figures are more likely to be the result of “persistent effects” from the financial crisis, rather than temporary, cyclical factors which will fade away as the economy recovers. Just under half (around 6 to 9 per cent) of the UK’s productivity gap can be explained by the hypothesis that the crisis resulted in underlying damage to...

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