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Tag Archives: Academic research & research papers

What Has Central Bank Independence Ever Done for Us?

Andy Haldane in this speech summarizes the views on central bank independence so far: This year has seen central bank balance sheets expand further. Global QE now stands at around $17 trillion and is set to rise further. For some, this has blurred the distinction between monetary and fiscal policies to an even greater extent than in the past. It has also intensified the debates and concerns around central bank independence expressed at the Bank’s conference three years ago. Against that...

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Firms facing negative deposit rates invest more and create more jobs

Evidence from Denmark: The extent to which negative monetary policy interest rates stimulate the economy has a subject of recent discussion among academics and policymakers. Using new comprehensive Danish microdata, this column shows that firms exposed to negative deposit rates to a higher degree than other firms increase their fixed investments and employment – after due control for changes in the level of interest rates. These findings are suggestive of an additional monetary...

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We are all Behavioral, More or Less: A Taxonomy of Consumer Decision Making

Victor Stango & Jonathan Zinman in this new NBER paper: We examine how 17 behavioral biases relate to each other, to other decision inputs, and to decision outputs. Most consumers exhibit multiple biases in our nationally representative panel data. There is substantial heterogeneity across consumers, even within similar demographic/skill groups. Biases are positively correlated within person, especially after adjusting for measurement error, and less correlated with other...

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The cost efficiency improvement of Norwegian banks can be explained by automation and digitalisation

Henrik Andersen of Norges Bank (Norway Central Bank) in this paper shows benefits of automation and digitalisation on banks: Operating costs in the Norwegian banking sector have been reduced considerably in recent decades, both as a share of income and assets. This has increased banks’ resilience to increased losses and reduced the risk of crises. In this article, I analyse how costs have been reduced and the main drivers of the cost efficiency improvement. The results suggest that...

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Antitrust in the digital economy: Views of leading economists on the market dominance of technology giants

Romesh Vaitilingam of Voxeu summarises the views: In October 2020, the US Department of Justice launched a federal antitrust lawsuit against Google, accusing the firm of abusing its dominance in the market for internet search. The IGM Forum at Chicago Booth invited its panels of leading US and European economists to express their views on the nature of the market dominance of Google and other technology giants in the digital economy, and what the appropriate policy response might be. As...

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Responses of International Central Banks to the COVID-19 Crisis

Jacob Haas, Christopher J. Neely, and William R. Emmons in this research paper have a useful timeline of the 4 central banks: This article reviews and explains the recent policy reactions of the Federal Reserve, the European Central Bank, the Bank of England, and the Bank of Japan to the financial and macroeconomic turmoil caused by the COVID-19 pandemic. The financial and monetary policy actions of major central banks in the most recent crisis have, by some metrics, surpassed their...

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What pay ratios in NIFTY50 companies tell us about income inequality in India?

Reetika Khera and Meghna Yadav in this ideasforindia research article: In the wake of the economic crisis triggered by the Covid-19 pandemic and associated lockdowns, demands for relief from the corporate sector were as vocal as those for affected workers. However, the same corporates were simultaneously paying shockingly high salaries to their CEOs. Analysing data from NIFTY50 companies for 2019-20, Khera and Yadav show that large inequalities exist between remuneration of top...

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Regulating Fintech in Europe: Lessons from the collapse of Wirecard

Very important research by Giorgio Barba Navaretti, Giacomo Calzolari, Alberto Pozzolo. Regulators and central banks will soon be dealing with fintechs and their failures. Wirecard gives us some lessons for future: The default of Wirecard highlights several problems in the regulation and supervision of Fintech companies, with regulatory holes in investor protection, customer protection, and financial stability. This column argues that since Fintech companies can be very complex, their...

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Gulags, crime, and elite violence: origins and consequences of the Russian mafia

Jakub Lonsky of Bank of Finland in this working paper does a lot of mining of references over 100 years : This paper studies the origins and consequences of the Russian mafia (vory-v-zakone). I web scraped a unique dataset that contains detailed biographies of more than 5,000 mafia leaders operating in 15 countries of the (former) Soviet Union at some point between 1916 and 2017. Using this data, I first show that the Russian mafia originated in the Gulag – the Soviet system of forced...

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Central Bank of Israel invests forex reserves in equity to boost returns

Bank of Israel Deputy Governor Andrew Abir discusses the forex reserve investment strategy of the central bank: It is important that the investment strategy for the foreign exchange reserves, subject to attaining the security and liquidity targets, generate an average return over time that is at least equal to the cost of financing the reserves (the cost of liabilities on the Bank’s balance sheet). The Bank of Israel is constantly examining ways to adjust the investment policy and the...

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