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The latest threat to inflation targeting is inflation data

Thursday, 24 September 2015
blog
Inflation targeting is an extremely resilient policy. It survived an attempted lynching after the financial crisis, when a mob of economists such as David Blanchflower blamed it for the Great Recession. There was some introspection, but none of the method’s adherents changed course. In fact, the United States Federal Reserve made its inflation target more explicit. India this year adopted one.

Two Key Words in China’s Currency Policy: Control and Balance

Monday, 31 August 2015
publication
The past few weeks have been turbulent for China’s economy, to say the least, with its currency, the renminbi (RMB) — also known as the yuan — declining sharply, nearly two percent against the dollar on August 11, the biggest one-day change in the currency in 20 years. In total, it experienced a 4.4 percent devaluation from August 11 to August 13, shocking the global financial markets. The world interpreted China's move as a currency war or currency manipulation, prompting the devaluation of currencies in many emerging markets.

The Export-Driven Model of Economic Growth is Dead

Monday, 31 August 2015
blog
India’s central bank governor upset some people in New Delhi when he first suggested that Prime Minister Narendra Modi was wrong if he thought he could load his country out of poverty by applying China's growth model.

China’s Daring Depreciation

Tuesday, 18 August 2015
article
On August 11, the People’s Bank of China lowered the central parity rate of the renminbi by 1.9%, sending shockwaves around the globe. Many foreign commentators condemned the devaluation as a blatant attempt to boost Chinese exports – a move that would, they warned, spark a new round of currency wars. But there are good reasons to believe that this was not China’s motivation at all.

The Promise and Peril of Macroprudential Policy

Friday, 7 August 2015
article
Central bankers continue to fret about frothy asset markets – as well they should, given the financial crisis of 2008-2009. Having been burned once, they are now doubly shy. And China’s recent stock-market plunge has certainly not eased their fears.

India’s politicians are finding it hard to let go of their central bank

Friday, 31 July 2015
blog
Financial markets sent Indian Prime Minister Narendra Modi’s government a message this week: leave Raghuram Rajan alone. India’s main stock market fell after the release in New Delhi of a draft proposal that would empower the government to select the majority of members of the Reserve Bank of India’s new monetary policy committee.

Rule, Germania

Thursday, 30 July 2015
article
A persistent theme – indeed the leitmotif – of the way that German leaders discuss the eurozone is their insistence on the importance of following the rules. That refrain is followed by a chorus from the rest of the monetary union demanding to know why Germany is taking such an inflexible approach. The answer, it turns out, reflects the way Germany’s federal system of government has shaped its decision-making, as well as Germany’s historic experience with debt crises.

What Stephen Poloz’s latest rate cut tells us about Canada’s central bank chief

Friday, 24 July 2015
blog
Reputations were restored on Toronto’s Bay Street last week. Forecasters at institutions such as Royal Bank of Canada and Canadian Imperial Bank of Commerce — who were embarrassed by the Bank of Canada’s shock interest rate cut in January — correctly predicted that deteriorating economic data would prompt Stephen Poloz to reduce Canada’s benchmark rate a second time in 2015. The target rate for overnight loans between banks now is 0.5 per cent — a quarter point above what the central bank says is its effective lower bound.

Uganda: Will Mutebile Get a New Mandate At the Central Bank?

Tuesday, 21 July 2015
article
Mark Keith Muhumuza
Ezra Suruma, CIGI distinguished fellow for the Global Economy program, is mentioned in All Africa as a possible replacement for governor of the Bank of Uganda.

What to Expect From ECB Rate Decision

Thursday, 16 July 2015
article
Jonathan Ferro
Bloomberg's Jonathan Ferro previews the ECB rate decision. University of California Berkeley Professor Barry Eichengreen also speaks on "Bloomberg Surveillance."
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