Ignazio Angeloni, Daniel Gros, 16 July 2021

The outcome of the long-awaited second review of the ECB’s monetary policy strategy was communicated by the central bank on 8 July 2021. This column argues that the review constitutes a mixed bag. The asymmetry of the inflation target, a long standing source of ambiguity and potential policy mistakes, has been corrected by announcing a symmetric central target at 2%. But major ambiguities remain concerning the width of the tolerance band around 2%, the definition of the relevant price index, the interpretation of the inflation process, and the way monetary policy is prepared to team-up with fiscal authorities to preserve the euro’s stability going forward. All in all, the glass remains half-empty and the water it contains is somewhat muddy. 

Gareth Campbell, Richard Grossman, John Turner, 04 September 2019

Although long-run stock market data are an important indicator, obtaining them is challenging. This column constructs new long-run broad-based indices of equities traded on British securities markets for the period 1829-1929 and combines them with a more recent index to examine the timing of British business cycles and compare returns on home and foreign UK investment. One finding is that the capital gains index of blue-chip companies appears to be a good bellwether of macroeconomic behaviour.

Stephen Redding, David Weinstein, 03 October 2016

Big data stands to transform economic measurement in substantial ways. The volume and precision of data available allows economists to revisit the foundational assumptions underpinning common indexes. This column presents a new empirical methodology that leverages big data to translate nominal numbers into real output or welfare. ‘The unified approach’ nests major price indexes and addresses implicit biases in these measures. An examination with barcode data suggests that standard methods of measuring welfare overstate cost of living increases by ignoring new products and demand shifts.


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