nep-cba New Economics Papers
on Central Banking
Issue of 2016‒02‒23
24 papers chosen by
Maria Semenova
Higher School of Economics

  1. Brave new world? Macro prudential policy and the new political economy of The Federal Reserve By Lucy Goodhart
  2. Monetary policy, excessive risk-taking and banking crisis By Zaghdoudi, Taha
  3. The European Central Bank’s quantitative easing programme: limits and risks By Grégory Claeys; Alvaro Leandro
  4. Measuring the instability of China's financial system: Indices construction and an early warning system By Sun, Lixin; Huang, Yuqin
  5. Monetary policy during financial crises: Is the transmission mechanism impaired? By Jannsen, Nils; Potjagailo, Galina; Wolters, Maik H.
  6. Friedman, Monetarism and Quantitative Easing By Olivo, Victor
  7. Sovereign Debt Risk in Emerging Countries: Does Inflation Targeting Adoption Make Any Difference? By Alexandru MINEA; Jean-Louis COMBES; Weneyam Hippolyte BALIMA
  8. A double-edged sword: High interest rates in capital control regimes By Gudmundsson, Gudmundur S.; Zoega, Gylfi
  9. Can we prove a bank guilty of creating systemic risk?: a minority report By Jon Danielsson; Kevin R. James; Marcela Valenzuela; Ilknur Zer
  10. Exchange rates and monetary spillovers By Guillaume Plantin; Hyun Song Shin
  11. Systemic risk spillovers in the European banking and sovereign network By Betz, Frank; Hautsch, Nikolaus; Peltonen, Tuomas A.; Schienle, Melanie
  12. QE and the Bank Lending Channel in the United Kingdom By Nick Butt; Rohan Churm; Michael McMahon; Arpad Morotz; Jochen Schanz
  13. Money and monetary policy in Israel during the last decade By Benchimol, Jonathan
  14. Quantitative Easing in Japan and the UK An Econometric Evaluation of the Impacts of Unconventional Monetary Policy on the Returns of Aggregate Output and Price Levels By Troug, Haytem Ahmed; Murray, Matt
  15. Policy Externalities and Banking Integration By Smolyansky, Michael
  16. Eurosystem debts do matter By Whittaker, John
  17. CoRisk: measuring systemic risk through default probability contagion By Paolo Giudici; Laura Parisi
  18. Lobbying on Regulatory Enforcement Actions: Evidence from Banking By Lambert, Thomas
  19. Monetary Policy Evaluation using a Rational Expectations Model: the UK case By Vasilev, Aleksandar
  20. Estimating the impact of monetary policy on inequality in China By Sánchez-Fung , José R.
  21. Fiscal Policy and Financial Distress: A Balance Sheet Perspective By John FitzGerald; Philip Lane
  22. The role of commodity prices in forecasting U.S. core inflation By Gospodinov, Nikolay
  23. Some Historical Reflections on the Governance of the Federal Reserve By Michael Bordo
  24. Банк России На Перепутье: Стоит Ли Смягчать Денежно-Кредитную Политику? (The Bank of Russia at a Crossroads: Whether to Ease Monetary Policy?) By Pavel Trunin; Eugene Goryunov

  1. By: Lucy Goodhart
    Abstract: The Financial Crisis that started in 2007 ushered in new responsibilities for central banks, particularly for what is termed “macro-prudential policy,” or MPP. The goal of this policy is to monitor and contain overall risk in the financial sector. Implementing MPP, however, carries the potential for distributional conflict with the largest financial firms and the politicization of central bank policy. In light of this risk, this essay analyses the institutional implications of MPP for a leading central bank, the U.S. Federal Reserve. Specifically, how will MPP affect the autonomy of the Fed to set the policy it thinks right? The analysis is based on interviews with financial regulators, including Fed staffers and policymakers, and with journalists who report on financial regulation. It is also informed by a case study of the “Volcker Revolution” in monetary policy. Based on these sources, I identify the factors that contributed to Fed autonomy in the conduct of monetary policy during the Volcker Revolution and assess the extent to which those same factors hold for MPP. I close with an assessment of what MPP means for the new political economy of the Fed in particular and developed world central banks more broadly.
    Keywords: Sovereign Default; Debt Crises; Political Survival; Networks; Voter Behavior.
    JEL: R21
    Date: 2015–01–08
  2. By: Zaghdoudi, Taha
    Abstract: This paper examines the relationship between monetary policy and banks excessive risk-taking and banking crisis. We use a panel of data consisting of 22 Latin American countries, the OECD and South-East Asia, which experienced banking crises between 1990 and 2013. Our empirical results show that the adoption of an expansionary monetary policy via an increase in the money supply and the application of low interest rates over an extended period of time may induce an increase in banks risk-taking. However, a restrictive monetary policy with high interest rates increases the risk of banking crisis.
    Keywords: Monetary policy, bank risk, panel co-integration test
    JEL: E44 E51 E52 G21
    Date: 2015–07
  3. By: Grégory Claeys; Alvaro Leandro
    Abstract: HIGHLIGHTS The European Central Bank (ECB) has made a number of significant changes to the original guidelines of its quantitative easing (QE) programme since the programme started in January 2015. These changes are welcome because the original guidelines would have rapidly constrained the programme’s implementation. The changes announced expand the universe of purchasable assets and give some flexibility to the ECB in the execution of its programme. However, this might not be enough to sustain QE throughout 2017, or if the ECB wishes to increase the monthly amount of purchases in order to provide the necessary monetary stimulus to the euro area to bring inflation back to 2 percent. To increase the programme’s flexibility, the ECB could further alter the composition of its purchases. The extension of the QE programme also raises some legitimate questions about its potential adverse consequences. However, the benefits of this policy still outweigh its possible negative implications for financial stability or for inequality. The fear that the ECB’s credibility will be undermined because of its QE programme also seems to be largely unfounded. On the contrary, the primary risk to the ECB’s credibility is the risk of not reaching its 2 percent inflation target, which could lead to expectations becoming disanchored. EXECUTIVE SUMMARY The European Central Bank (ECB) has made a number of significant changes to the original design of its quantitative easing (QE) programme since the programme started in January 2015. The bank has expanded the list of national agencies whose securities are eligible for the Public Sector Purchase Programme (PSPP); it has changed the issue share limit (ensuring that the Eurosystem will not breach the prohibition on monetary financing), which was originally set at 25 percent, to 33 percent (at least for securities without collective action clauses); it has added regional and local government bonds to the list of eligible assets; it has announced that the programme would continue past September 2016, the previously-announced minimum end-date, to March 2017 “or beyond, if necessary”; and it has declared its intention to reinvest the principal payments on the securities purchased under the programme as they mature. As explained in Claeys et al (2015b), the programme’s original guidelines would have constrained the size and duration of the programme, especially if it was sustained throughout 2017. The changes to the design of the programme announced during 2015 greatly expand the universe of purchasable assets and should therefore delay the point at which limits will be reached. However, the decision to reinvest the principal payments as bonds mature, by increasing the monthly monetary purchase after March 2017, would also lead to the limits being reached sooner. In the same way, a decision by the ECB to increase the amount of PSPP purchases each month, for instance from €44 billion to €64 billion, would also frontload the purchases. In the end, because of the issue share limit, for a given set of securities there will always be a trade-off between larger monthly purchases and a prolonged programme. Further changes to the design of the programme will have to be implemented in order to increase the duration of the programme if the limit is binding in a major country before inflation is on the path towards 2 percent. These could include waiving the issue limit for AAA-rated bonds, or purchasing senior uncovered bank bonds as well corporate bonds. A more radical change could be to move away from an allocation of asset purchases between countries based on the ECB capital keys to an allocation based on the actual size of their outstanding debt. We also discuss the possible financial stability risks of a prolonged and large-scale QE programme, and conclude that the benefits of large-scale asset purchases outweigh their potential risks in terms of financial stability. However, micro- and macro-prudential policies should be used forcefully to prevent such risks from materialising. We also consider the potential effects that a prolonged asset-purchase programme could have on inequality. The increase in inequality observed in many advanced countries in recent decades is a long-term trend and primarily the result of deep structural changes. Our view is that the primary mandate of the ECB is to maintain price stability, and considerations of inequality are not within its purview, unless inequality prevents the transmission of monetary policy in some way. The ECB should therefore focus on fulfilling its price stability mandate by supporting the fragile recovery now taking place in the euro area. This is the best way for monetary policy to contribute to the avoidance of an increase in inequality. The fear that the ECB will lose its credibility solely because it is currently buying a large amount of sovereign bonds appears to be largely unfounded. The primary risk to the ECB’s credibility is the risk of not reaching its inflation target.
    Date: 2016–02
  4. By: Sun, Lixin; Huang, Yuqin
    Abstract: In this paper, employing several econometric techniques, the authors construct a financial stress index (CNFSI) and a financial conditions index (CNFCI) to measure the instability of China's financial system. The indices are based on the monthly data collected from China's inter-bank markets, stock markets, foreign exchange markets and debt markets. Using these two indices, they identify the episodes of systemic financial stress, and then evaluate the indices. The empirical results suggest that the CNFSI performs better than the CNFCI. Furthermore, the authors propose four leading indicators for monitoring China's financial instability, and provide a primary early warning system for China's macroprudential regulations.
    Keywords: financial stress index,financial conditions index,China's financial system,leading indicators,early warning system
    JEL: G18 C43 E44
    Date: 2016
  5. By: Jannsen, Nils; Potjagailo, Galina; Wolters, Maik H.
    Abstract: We study the macroeconomic effects of monetary policy during financial crises using a Bayesian panel vector autoregressive (PVAR) model for 20 advanced economies. We interact all of the endogenous variables with financial crisis dummies, which are constructed using the narrative approach. We also distinguish between an acute initial phase of financial crises and a subsequent recovery phase. We show that an expansionary monetary policy shock has large positive effects on output and inflation during the acute phase of a financial crisis. These effects are larger than those during non-crisis periods. Decreased uncertainty as well as increases in consumer confidence and share prices explain these large effects, whereas these variables are much less relevant for monetary policy transmission outside financial crises. Counterfactual analysis shows that the transmission mechanism would be impaired without the effects of monetary policy on these variables, where credit would not react at all and the response of output would be substantially lower. During the recovery phase of a financial crisis, output and inflation are generally non-responsive to monetary policy shocks.
    Keywords: fiscal monetary policy transmission,financial crisis,financial stability,state-dependence,uncertainty,panel VAR
    JEL: C33 E52 E58 G01
    Date: 2015
  6. By: Olivo, Victor
    Abstract: This paper argues that the theoretical origin of QE programs, as a general concept, clearly links to Friedman’s (and monetarist) ideas, but that the specific implementation of QE operations to cope with the 2008 financial crisis does not comply with key principles developed by Friedman. Based on Friedman’s work during the sixties, I contend that his monetary framework links to QE through what he (and Anna Schwartz) called the “monetary” effects of monetary policy and not the portfolio balance effect highlighted by Nelson (2011) and Bernanke (2012). The combination of the “monetary” effects and the stabilizing role of monetary policy should produce QE programs with a path of the monetary base (central bank assets) and M2 that differs dramatically from what transpired under the 2008-2014 QE arrangements based on the portfolio balance effect.
    Keywords: Monetary policy,monetarism,quantitative easing,open market operations, financial crisis, monetary effects, portfolio balance effect
    JEL: E52 E58
    Date: 2015–06–17
  7. By: Alexandru MINEA (Centre d'Etudes et de Recherches sur le Développement International(CERDI)); Jean-Louis COMBES (Centre d'Etudes et de Recherches sur le Développement International(CERDI)); Weneyam Hippolyte BALIMA
    Abstract: Based on a sample of 38 emerging countries, we find that inflation targeting (IT) adoption improves sovereign debt risk. However, we show that IT adoption effectiveness is sensitive to several structural characteristics, such as the phase of the business cycle, the fiscal stance, and the level of development. In addition, the measure of the risk, namely ratings (rating agencies) or bond yield spreads (markets), as well as the form of IT (full-fledged or partial) is equally crucial for the effects of IT adoption on sovereign debt risk. Thus, our paper provides valuable insights for IT implementation as a device for improving emerging market economies’ access to international financial markets for financing long-term investment projects and supporting potential economic growth.
    Keywords: Inflation targeting; Sovereign debt ratings; Government bond yield spreads, Emerging markets; Propensity scores matching
    JEL: G15 F34 H63 E58 E44
    Date: 2015–02
  8. By: Gudmundsson, Gudmundur S.; Zoega, Gylfi
    Abstract: This paper describes the relationship between central bank interest rates and exchange rates under a capital control regime. Higher interest rates may strengthen the currency by inducing owners of local currency assets not to sell local currency off shore. There is also an effect that goes in the opposite direction: higher interest rates may also increase the flow of interest income to foreigners through the current account, making the exchange rate fall. The historical financial crisis now under way in Iceland provides excellent testing grounds for the analysis. Overall, the experience does not suggest that cutting interest rates moderately from a very high level is likely to make a currency depreciate in a capital control regime, but it highlights the importance of effective enforcement of the controls.
    Keywords: financial crises,capital controls,policy rates,exchange rates
    JEL: G01 E42 E52 E58
    Date: 2016
  9. By: Jon Danielsson; Kevin R. James; Marcela Valenzuela; Ilknur Zer
    Abstract: Since increasing a bank's capital requirement to improve the stability of the financial system imposes costs upon the bank, a regulator should ideally be able to prove beyond a reasonable doubt that banks classified as systemically risky really do create systemic risk before subjecting them to this capital punishment. Evaluating the performance of two leading systemic risk models, we show that estimation error alone prevents the reliable identification of the most systemically risky banks. We conclude that it will be a considerable challenge to develop a riskometer that is both sound and reliable enough to provide an adequate foundation for macroprudential policy.
    Keywords: Systemic risk; macroprudential policy; financial stability; risk management
    JEL: G32 F3 G3
    Date: 2015–09
  10. By: Guillaume Plantin; Hyun Song Shin
    Abstract: When does the combination of flexible exchange rates and domestic inflation-oriented monetary policy guarantee insulation from global financial conditions? We examine a dynamic global game model of international portfolio flows where, for some combination of parameters, the unique equilibrium exhibits the observed empirical feature that currency appreciation goes hand-in-hand with lower domestic interest rates and higher credit growth. When reversed, tighter monetary conditions go hand-in-hand with capital outflows and currency depreciation.
    Keywords: currency appreciation, capital flows, global games
    Date: 2016–01
  11. By: Betz, Frank; Hautsch, Nikolaus; Peltonen, Tuomas A.; Schienle, Melanie
    Abstract: We propose a framework for estimating time-varying systemic risk contributions that is applicable to a high-dimensional and interconnected financial system. Tail risk dependencies and systemic risk contributions are estimated using a penalized two-stage fixed-effects quantile approach, which explicitly links time-varying interconnectedness to systemic risk contributions. For the purposes of surveillance and regulation of financial systems, network dependencies in extreme risks are more relevant than simple (mean) correlations. Thus, the framework provides a tool for supervisors, reflecting the market's view of tail dependences and systemic risk contributions. The model is applied to a system of 51 large European banks and 17 sovereigns during the period from 2006 through 2013, utilizing both equity and CDS prices. We provide new evidence on how banking sector fragmentation and sovereign-bank linkages evolved over the European sovereign debt crisis, and how they are reflected in estimated network statistics and systemic risk measures. Finally, our evidence provides an indication that the fragmentation of the European financial system has peaked.
    Keywords: systemic risk contribution,tail dependence,network topology,sovereignbank linkages,Value-at-Risk
    JEL: G01 G18 G32 G38 C21 C51 C63
    Date: 2016
  12. By: Nick Butt (Bank of England); Rohan Churm (Bank of England); Michael McMahon (Centre For Economic Policy Research; Centre For Macroeconomics (CFM); University of Warwick); Arpad Morotz (Bank of England); Jochen Schanz (Bank for International Settlements)
    Abstract: We test whether quantitative easing (QE), in addition to boosting aggregate demand and in ation via portfolio rebalancing channels, operated through a bank lending channel (BLC) in the UK. Using Bank of England data together with an instrumental variables approach, we find no evidence of a traditional BLC associated with QE. We show, in a simple framework, that the traditional BLC is diminished if the bank receives `flighty' deposits (deposits that are likely to quickly leave the bank). We show that QE gave rise to such flighty deposits which may explain why we find no evidence of a BLC.
    Keywords: Monetary policy, bank lending channel, quantative easing
    JEL: E51 E52 G20
    Date: 2015–10
  13. By: Benchimol, Jonathan
    Abstract: This study examines how money and monetary policy have influenced output and inflation during the past decade in Israel by comparing two New Keynesian DSGE models. One is a baseline separable model (Galí, 2008) and the other assumes non-separable household preferences between consumption and money (Benchimol & Fourçans, 2012). We test both models by using rolling window Bayesian estimations over the last decade (2001–2013). The results of the presented dynamic analysis show that the sensitivity of output with respect to money shocks increased during the Dot-com, Intifada, and Subprime crises. The role of monetary policy increased during these crises, especially with regard to inflation, even though the effectiveness of conventional monetary policy decreased during the Subprime crisis. In addition, the non-separable model including money provides lower forecast errors than the baseline separable model without money, while the influence of money on output fluctuations can be seen as a good predictive indicator of bank and debt risks. By impacting and monitoring households’ money holdings, policy makers could improve their forecasts and crisis management through models considering monetary aggregates.
    Keywords: Divisia monetary aggregates; Monetary policy; DSGE; Crises; Israel
    JEL: E31 E32 E37 E51 E52 E58
    Date: 2016–02–09
  14. By: Troug, Haytem Ahmed; Murray, Matt
    Abstract: The research finds that the actions of the BoJ were more successful in raising aggregate levels of output and price than those of the BoE. In Japan, all financial variables analysed were found to transmit the benefits of QME, whilst in the UK the effect only occurs through the stock market and bank lending. The overall results however, are found to be small. To analyse the effects of the most recent policies of QME by the Bank of Japan (BoJ) and the Bank of England (BoE) on aggregate levels of output and prices in Japan and the UK, We perform two-step VAR and VEC analysis to first identify the effects of QMEP before determining the financial transmission mechanism by which these effects take place. This analysis aims to make contribution to the research surrounding the effects of QMEP. It is wholly reasonable to presume that both the Japanese and UK economies may experience similar economic difficulties in the future and further understanding of the effects of QMEP will enable more targeted policy decisions to be implemented to effectively protect stable inflation levels and stimulate future economic growth.
    Keywords: Quantitative Easing, Monetary Policy, Bank of Japan, Bank of England, Vector Auto-Regression, Vector Error Correction
    JEL: C1 C13 E5 E52 E58
    Date: 2015–09
  15. By: Smolyansky, Michael (Board of Governors of the Federal Reserve System (U.S.))
    Abstract: Can policies directed at the banking sector in one jurisdiction spill over and affect real economic activity elsewhere? To investigate this question, I exploit changes in tax rates on bank profits across U.S. states. Banks respond by reallocating small-business lending to otherwise unaffected states. Moreover, counties in non-tax-changing states that have more exposure to "treated" banks experience greater changes in lending, which in turn impacts local employment. The findings demonstrate that policies aimed at the banking sector in one jurisdiction can impose externalities on other regions. Critically, financial linkages between regions serve as the transmission channel for these policy externalities.
    Keywords: Banks; Credit Supply; Internal Capital Markets; Policy Arbitrage; Small Business Lending; Taxation
    Date: 2016–02–08
  16. By: Whittaker, John
    Abstract: Since September 2015, the European Central Bank has been publishing Target2 balances of the eurozone national central banks. But this presents an incomplete picture of intra-eurosystem debts because it does not include those arising from the issue of banknotes. The ECB also plays down the importance of Target2 debts as a “normal feature of the decentralised implementation of monetary policy in the euro area”. But if Greece were to leave the euro and its eurosystem debt (currently €114bn) were written off, other eurozone countries would bear the loss, in addition to losses on official loans. There is no effective mechanism for limiting eurosystem debts. And exit risk – the risk that Greece or some other eurozone country with large eurosystem debts will leave the euro – will always be present.
    Keywords: Target2, eurosystem, monetary union, euro banknotes
    JEL: E42 E52 E58 F33
    Date: 2016–02–01
  17. By: Paolo Giudici (Department of Economics and Management, University of Pavia); Laura Parisi (Department of Economics and Management, University of Pavia)
    Abstract: We propose a novel systemic risk measurement model, based on stochastic processes, correlation networks and conditional probabilities of default.For each country we consider three different spread measures, one for each sector of the economy (sovereigns, corporates, banks), and we model each of them as a linear combination of two stochastic processes: a country-specific idiosyncratic component and a common systematic factor. We then build a partial correlation network model, and by combining it with the spread measures we derive the conditional default probabilities of each sector. Comparing them with the unconditional ones, we obtain the CoRisk, which measures the variation in the probability of default due to contagion effects. Our measurement model is applied to understand the time evolution of systemic risk in the economies of the European monetary union, in the recent period. The results show that, overall, the sovereign crisis has increased systemic risks more than the financial crisis. In addition, peripheral countries turn out to be exporters, rather than importers of systemic risk, and, conversely, core countries.
    Keywords: correlation networks, default probabilities, systemic risk, stochastic processes
    Date: 2016–02
  18. By: Lambert, Thomas
    Abstract: There is growing concern, but still little systematic evidence, about the incidence and drivers of lobbying efforts made by the U.S. banking industry. This paper documents the relationships between lobbying, regulatory oversight, and bank risk taking. Using a large sample of commercial and savings banks, I find that lobbying banks are less likely to be subject to a severe enforcement action, suggesting that banks engage in lobbying to gain preferential treatment. Among the lobbying dimensions studied, lobbyists with prior employment in public offices are more effective at reducing the probability of an action, especially in period of intense enforcement activity. These findings are robust to controlling for supervisory ratings and account for endogeneity concerns by employing instrumental variables strategies. I also show an increase in default and credit risk at lobbying banks. Overall, these results appear rather inconsistent with an information-based explanation of bank lobbying, but consistent with the capture theory of regulation.
    Keywords: Banking supervision, enforcement actions, lobbying, moral hazard, risk taking
    JEL: D72 G21 G28
    Date: 2015–06
  19. By: Vasilev, Aleksandar
    Abstract: This study follows Rotemberg and Woodford (1998) and estimates a three-equation model of output, interest rate and inflation, in order to evaluate alternative rules by which the UK monetary authority may decide on setting the main interest rate. As in the original paper, the model setup is a rational-expectations setup, augmented with nominal price-setting frictions a la Calvo (1983). The model-generated impulse responses match quite well the estimated responses to a monetary shock. In addition, when additional technology and taste shocks are added, the theoretical model can account for the fluctuations in the UK data as well as an unrestricted VAR(1) does.
    Keywords: VAR,Taylor rule
    JEL: E37
  20. By: Sánchez-Fung , José R. (BOFIT)
    Abstract: The paper estimates the impact of monetary policy on income inequality in China. The empirical modelling finds that a battery of monetary indicators, including a monetary overhang measure derived from a money demand equation, and the change in the unemployment rate lead to increases in the Gini coefficient. However, only unemployment is statistically significant. The lack of significance of the monetary indicators is robust to alternative specifications with variability in nominal aggregate demand instead of unemployment.
    Keywords: monetary policy; inequality; inflation; unemployment; China
    JEL: D31 E52
    Date: 2015–05–13
  21. By: John FitzGerald (Department of Economics, Trinity College Dublin); Philip Lane (Department of Economics, Trinity College Dublin)
    Abstract: Governments actively manage the public balance sheet during episodes of financial distress. Under these circumstances, the stock of gross public debt is not a sufficient statistic for fiscal sustainability. In this paper, we examine the roles of financial asset acquisition, liquidity management, debt management and the central bank balance sheet in determining the fiscal health of a government. We argue that a strategy of “under-promising and over-delivering” is essential in restoring market access.
    Keywords: Government balance sheet, public debt, management of debt
    JEL: H63 E58
    Date: 2016–02
  22. By: Gospodinov, Nikolay (Federal Reserve Bank of Atlanta)
    Abstract: This note documents a curious finding about the substantial forecast ability of a simple aggregator of three commodity futures prices for U.S. core inflation. The proposed aggregator reduces the out-of-sample root mean squared error for 12-month-ahead inflation forecasts of the benchmark AR(1) model by 28 percent (20 percent) for the PCE (CPI) measure of core inflation. To avoid obfuscation of the sources of forecast ability, the model is intentionally kept simple, although extensions for improving and increasing the robustness of the forecast procedure are also discussed.
    Keywords: core inflation; commodity futures; convenience yields; forecasting
    JEL: C53 E37 G12
    Date: 2016–02–01
  23. By: Michael Bordo
    Abstract: This paper examines the historical record on Federal Reserve governance and especially the relationship between the Reserve banks and the Board from the early years of the Federal Reserve to the recent crisis. From the record I consider some lessons for the current debate over reform of the Federal Reserve. It was prepared for the May 21, 2015 Hoover Institution conference, "Central Bank Governance and Oversight Reform: A Policy Conference."
    Date: 2015–05
  24. By: Pavel Trunin (Gaidar Institute for Economic Policy); Eugene Goryunov (Gaidar Institute for Economic Policy)
    Abstract: The position of supporters of the policy easing by the Bank of Russia is the following: if the monetary authorities of developed countries abandon their principles, then why do they rely on Russia? Is it not better instead to do exactly what the central banks in the US, UK, Japan and the euro area do - to stimulate economic growth by quantitative easing? According to adherents of monetary policy easing, it is necessary to turn the Bank of Russia into the institute of development, making it one of the investors of economic growth. Furthermore, it should be included in the process of creating "long cheap money", as it occurs in the US and the European Union. Позиция сторонников смягчения политики Банка России следующая: если денежные власти развитых стран отказываются от своих принципов, то зачем тогда России на них полагаться? Не лучше ли вместо этого делать ровно то, что делают центральные банки в США, Великобритании, Японии и еврозоне — стимулировать экономический рост денежной эмиссией? По мнению адептов смягчения монетарной политики, нужно превратить Банк России в институт развития, сделав его соинвестором экономического роста. Кроме того, он должен быть включен в процесс создания «длинных дешевых денег», как это происходит в США и Европе.
    Keywords: Russian economy, Bank of Russia, monetary policy, quantitative easing
    JEL: E31 E43 E44 E51 E52 E58
    Date: 2013

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