Cross-border spillover effects of unconventional monetary policies on Swiss asset prices

Unconventional monetary policies (UMPs) announced by the Federal Reserve, the European Central Bank, the Bank of England and the Bank of Japan exert important spillover effects on asset prices in Switzerland. Using a broad UMP event set and a long-term bond-futures based measure of market anticipation, we show that surprisingly expansionary UMPs lower Swiss government and corporate bond yields, induce the Swiss franc to appreciate, and dampen Swiss equity prices. Four extensions provide further insights. First, the estimated effects are strongest for announcements by the ECB. Second, the impact on government bonds is largest for bonds with residual maturities of 7–10 years. Third, the impact of foreign UMP shocks on exchange rates and Swiss bond yields is less pronounced after the introduction of the minimum rate of 1.20 Swiss franc per Euro by the Swiss National Bank on September 6, 2011, indicating that domestic monetary policy action partially affects the impact of external monetary shocks on domestic financial markets. Fourth, the sign of spillover effects differs for positive and negative UMP surprises, but their strength does not.     

The design and communication of systematic monetary policy strategies

The efficacy of central bank communications is inextricably linked to the characteristics of the monetary policy framework. Therefore, this paper presents a set of fundamental principles regarding the joint design of monetary policy strategy and communications. The practical implications of these principles are illustrated by considering a number of significant policy challenges faced by central banks in the advanced economies.     

马克思货币需求理论与西方货币需求理论的比较

货币理论是经济学中最富争论的理论之一。货币理论的基础也就是供求规律。对于其中的货币需求理论,从古至今有不少学者发表了不同的看法,形成了几种互不相同但彼此又有一定联系的学说。比较这些理论的异同,对于我们学习货币理论并制定和分析现实的货币政策具有重要的理论意义和实践价值。     

The Bank Lending Channel Revisited

A central proposition in research on the role of banks in the transmission mechanism is that monetary policy imparts a direct impact on deposits and that deposits act as the driving force of bank lending. This paper argues that the emphasis on policy‐induced changes in deposits is misplaced. A reformulation of the bank lending channel is proposed that works primarily through the impact of monetary policy on banks’ balance sheet strength and risk perception. Such a recasting implies, contrary to conventional wisdom, that greater reliance on market‐based funding enhances the importance of the channel.     

西方中央银行沟通视角下的预期管理研究：渠道、手段及效果

近年来,中央银行沟通成为一种新型的货币政策工具。基于中央银行沟通视角,分析西方国家在预期管理中的渠道、手段及效果,结论表明中央银行沟通有助于预期管理。借鉴西方国家沟通经验,提出中央银行的有效沟通,需要中央银行独立性及问责制作保障;重视沟通的规律性,强调沟通信息的清晰和准确;注重对宏观经济运行认识水平,提高公众的经济学素养。     

On Keynes on inflation and unemployment

Keynes tends to be represented as someone who thought that alleviating unemployment was more important than any other consideration. Interestingly it seems that this was not always the case; he did not recommend employment creation under all conditions of excess labour supply. The great inflation of World War I and its aftermath left an indelible impression on him, and this mitigated his position on the importance of high levels of employment. In 1920 he recommended that inflation in the UK be controlled even if some unemployment would result, and there is at least some hint in his work that the relative importance to him of inflation and unemployment did not vary much over the remainder of his life.     

Contained crisis and socialized risk: Unconventional monetary policy by the Bank of Japan in the 1890s

In the 1880s, Japan experienced its first stock investment boom, which was highly leveraged by the banking sector. In 1890, its first financial crisis occurred and triggered a de-leveraging process. With a high lower bound of the conventional interest rate intervention under the fixed exchange rate regime, the Bank of Japan decided to implement a massive securities purchases first time among major industrial economies and continued this unconventional policy until the early 1900s. We examine how the unconventional intervention for a decade affected the stock prices and the trade volumes, and show that the upward distortion in market pricing was considerable and that the equity-risk premium accordingly dropped, which meant socialization of the risk associated with the industrial investment.     

Restoring tourist confidence and travel intentions after disasters: some insights from a rejoinder to a series of unfortunate events in Malaysian tourism

Many countries face a decline in tourist confidence and reduced travel intentions after disasters. However, Malaysia – a country that experienced a series of aviation tragedies throughout 2014 – encountered an overall increase in inbound tourists and monetary receipts. This article more closely examines the effects of these unfortunate events on Malaysian tourism and identifies several strategic avenues that can contribute to restoring tourist confidence and reigniting tourist interest in travelling to disaster-stricken countries.     

The transmission of partner mental health to individual life satisfaction: Estimates from a longitudinal household survey

This paper investigates the relationship between partner's mental health and individual life satisfaction, using panel data and calculating the monetary valuation of mental illness. Accounting for measurement error and endogeneity of income, partners' mental health has a significant association with individual well-being. The additional income needed to compensate someone living with a partner with a mental condition is substantial (ranges between USD 33,000 and USD 50,000). Further, individuals do not show adaptation to partners' mental illness. The results have implications for policy-makers wishing to value the effects of policies that aim to impact on mental health and levels of well-being.     

Household Debt Overhang and Transmission of Monetary Policy

We investigate how the level of household indebtedness affects the monetary transmission mechanism in the U.S. economy. Using state‐dependent local projection methods, we find that the effects of monetary policy are less powerful during periods of high household debt. In particular, the impact of monetary policy shocks is smaller on GDP, consumption, residential investment, house prices, and household debt during a high‐debt state. We then build a partial equilibrium model of borrower households with financial constraints to rationalize these facts. The model points to the weakening of the home equity loan channel as a possible reason for the decline in monetary policy effectiveness when initial debt levels are high.