Archive for May 10th, 2021

ECB’s Young PHD in economics/finance competition

May 10, 2021

ECB’s young economists competition for PhDs in Economics/Finance. Students of any nationality can apply:

The theme of the 2021 ECB Forum on Central Banking is “Beyond the pandemic: the future of monetary policy”. Accordingly, PhD students are invited to submit papers on the following topics:

    • the consequences of corporate, public and household indebtedness for macroeconomic stabilisation after the coronavirus (COVID-19) pandemic
    • the heterogeneous impact of the coronavirus pandemic in terms of business dynamics, productivity and wages and its implications for the relative importance of different sectors and firms
    • the implications of climate change and the carbon transition for monetary policy and central bank operations

Papers on other topics relevant to central banking (including monetary policy, the deepening of the European Economic and Monetary Union, the functioning of the euro area economy and financial system, financial stability, and banking regulation and supervision) will also be considered.

Impact of Micro Financial reforms vs Impact of Macro Financial reforms

May 10, 2021

Spyridon Boikos, Ioannis Bournakis, Dimitris Christopoulos and Peter McAdam in this working paper differentiate between micro and macro financial reforms:

We develop a horizontal R&D growth model that allows us to investigate the different channels through which financial reforms affect R&D investment and patent activity.

First, a “micro” reform that abolishes barriers to entry in the banking sector produces a straightforward result: a decrease in lending rates which stimulates R&D investment and economic growth.

Second, a “macro” reform that removes restrictions on banks’ reserves and credit controls. While this reform increases liquidity, it also increases the risk of default, potentially raising the cost of borrowing. This we dub the “reserves paradox” – this makes banks offset the rise in the default rate with a higher spread between loans and deposit rates.

Thus our model suggests that whilst micro reforms boost innovation, macro reforms may appear negative. We test and find empirical support for these propositions using a sample of 21 OECD countries.


The Battle Over Patents: Why US-style patent system has come to dominate other methods of encouraging inventive activity?

May 10, 2021

Stephen H. Haber & Naomi R. Lamoreaux in this timely NBER paper which is first chapter of their upcoming book:

The Practice of Flexible Inflation Targeting in India – A Preliminary Assessment

May 10, 2021

Niranjan Rajadhyaksha and Prakhan Misra in this new IPPRI paper:

This paper examines how the new flexible inflation targeting framework has worked in practice in India, five years after it was introduced. The policy decisions taken by the Reserve Bank of India are analysed on four fronts — the trajectory of inflation, the inflation forecasting record, the voting behaviour of the monetary policy committee, and the ability to keep the weighted average call money rate within the policy corridor. These four themes represent the formal nominal anchor, the intermediate target, the central bank response function and the operating target of monetary policy. Each is a building block of the flexible inflation targeting framework. The paper then offers some suggestions on the road ahead for monetary policy practice in India, both given the experience of the past five years as well as the Covid-19 shock to the Indian economy.

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