infonet-economy

The ECB might seem to be the most independent central bank in the world. Its statutes were carefully designed to ensure independence and they are enshrined in an international treaty. Yet, while serving many governments may be a protection, it can also act as a constraint on policy decisions. This essay explains how the ECB has faced limits during the Eurozone crisis. First, it had...

An ongoing active debate considers the role of the Global Financial Cycle (GFC) in driving international capital flows - especially in emerging economies - as well as the policy options available to absorb their impact. We make two contributions to the debate. First, we rely on a structural measure of the GFC developed in a companion paper to identify episodes of large capital flows...

The sharp declines in oil prices starting in late 2014 sparked a debate about their effect on inflation and the world economy (e.g. GEP January 2015). The decline in oil prices lowered inflation in the short run and in some cases pushed some economies that already experience very low inflation into deflation. More surprisingly, data from the US, Euro area, UK and Israel shows that...

The increasing globalization of trade in goods and services and the deepening of financial markets have reduced frictions that may impede the operation of the PPP and UIP relationships in the short run. In this paper, we estimate the short term relative PPP and UIP relationships. Using data from Israel, which has a deep market for inflation expectations for 12 months, we show that...

Access to formal banking is increasing across the world and may transform how people manage their finances. We report from a field experiment that randomly provides access to a bank account to a representative sample of villagers in rural India. The treated respondents save actively into the account and their individual savings increase. There is, however, no significant impact on...

As the International Labour Organization (ILO) celebrates its centenary, its founding precept remains as relevant as ever: the main breeding grounds for threats to peace are the injustices and unequal opportunities that result from ongoing economic transformation. The moral idea that forged the ILO still lies at the heart of the international efforts for peace and development driving...

Au cours de la crise financière mondiale, la politique monétaire israélienne a eu recours à des mesures non conventionnelles parallèlement à des réductions énergiques du taux d’intérêt de la banque centrale. L’expérience acquise par Israël dans l’utilisation de ce type de mesures pendant la crise, leur suppression aux premiers signes de reprise et l’usage prolongé de l’une d’entre...