Guillermo Calvo, 20 June 2008

Here, one of the world’s leading macroeconomists argues that the explosion of commodity prices is the result of a very real global financial storm associated with excess liquidity in several non-G7 countries and nourished by the low interest rates set by G7 central banks. The commodity price explosion is a harbinger of future inflation.

Momtchil Pojarliev, Richard Levich, 16 February 2008

Professional currency trading managers earn large fees. This column summarises research evaluating their performance and identifies a select group of traders whose achievements may warrant their wages.

Michael Woodford, 17 January 2008

Central banks have experimented with ‘forward guidance’ – sending signals about the future path of interest rate policy more than just one decision ahead – as a way of stabilizing medium-to-longer run expectations. Here is a discussion of the phenomenon and some ideas on how the Fed could improve its signalling.

Tommaso Monacelli, 14 December 2007

The ECB’s decision to leave interest rates unchanged lacks transparency and appears inconsistent with the specific policy framework that the ECB itself has decided to embrace. In the current period of great uncertainty, transparency would pay large dividends.

Gilles Saint-Paul, 06 December 2007

Many observers call for US interest rate cuts to avoid a recession, but this is likely to perpetuate the current imbalances in the US economy. The US probably needs a recession to get the required correction in house prices and consumer spending. The Fed should signal its intention to hang tough and start thinking about how big a fall in GDP it will tolerate before intervening.

Charles Goodhart, 24 September 2007

Recent research suggests that the additional predictive power of the yield curve – beyond the information in other macroeconomic variables – often appeared during periods of uncertainty about the underlying monetary regime. This is true, for example, of the US during the Volcker disinflation episode.

Axel Leijonhufvud, 25 June 2007

An expansionary monetary policy and an historical conjuncture that happens to produce no inflation will lead to asset price inflation and deterioration of credit. At some stage, central banks will have to mop the liquidity or see inflation do it for them.

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