What’s at stake: the term “forward guidance” is used in economic jargon to describe central bank communications about the likely future path of policy rates. Standard monetary models imply that far future forward guidance has huge effects on current outcomes, and recent literature has been trying to reconcile this with reality.
The 5th Bruegel - Graduate School of Economics, Kobe University conference will focus on monetary policy.
The proposed Nord Stream 2 pipeline could destabilise European energy cooperation and offer Gazprom excessive influence in Central and Eastern Europe. These disadvantages do not justify the commercial benefits for German companies.
Gazprom is pushing ahead with plans to build a second gas pipeline under the Baltic sea, straight form Russia to Germany. Supporters claim that Ukraine cannot be relied on as a transit partner, and that Europe will need more gas in the future. Georg Zachmann is unconvinced, and argues that the project should wait.
After a decade of growth based on hydrocarbon booms, Central Asian countries are faced with increasing challenges to complete their transitions to a market economy and towards economic development and integration.
On 6 April Bruegel, as in previous years, hosted the presentation of the Euro Yearbook, a collection of experts’ insights on the construction of the European Monetary Union through 2016.
At this event, we are pleased to welcome Mr. Benoît Coeuré, Member of the Executive Board of the European Central Bank at Bruegel.
The European Monetary Union (EMU) was founded with the idea that nominal convergence would bring real convergence, but structural differences between members have proven wide enough to generate lasting asymmetric negative shocks across the euro area.
The final round of TLTRO financing was an unexpected hit with euro area banks. The aim of the programme is to encourage banks to increase lending to the real economy. However, with many now expecting a hike in deposit rates, banks’ enthusiasm might be driven largely by the chance to make a profit from the cheap loans.
This paper applies the info-gap approach to the unconventional monetary policy of the Eurosystem and so takes into account the fundamental uncertainty on inflation shocks and the transmission mechanism.
What’s at stake: the Financial Times reports that Peter Navarro, head of the US’s National Trade Council, has accused Germany of currency manipulation. He claims that the country uses a 'grossly undervalued' Euro to 'exploit' its trading partners. Angela Merkel replied that the Euro is managed by the European Central Bank, on which Germany does not exert influence. We review what the economic blogosphere thinks of this.
What were the reasons for the Indian government's sudden decision to remove 86% of hard currency from circulation? Will Modi's monetary intervention achieve its stated aim of fighting corruption? And what will be the wider implications for growth?