Podcast: Macro Waves

PodcastMacroWavesPublication

Covid-19 and the outlook for inflation 7/22/2020

COVID-19 causes balance sheet disruption 5/28/2020

Central banks: the need for re-assessing the objectives 2/26/2020

Negative interest rates and the paradox of saving 10/28/2019

The challenges of financial stability 9/4/2019

On the Same Theme

Covid-19 and the outlook for inflation in the real economy 7/22/2020
In the second episode, William De Vijlder turns to the real economy and examines the factors that could produce inflation. He draws the distinction between headline inflation and core inflation. Could core inflation, which is affected by tensions in the labour market and the markets for goods and services but also by inflation expectations, see an acceleration under current circumstances? William De Vijlder also looks at the supply side shock and the disruption of global value chains as a result of the pandemic. We will see how changes to these value chains could produce inflation.
Inflation, perceived inflation and expected inflation: very different things 7/22/2020
In the final episode, William De Vijlder turns to the psychological factors in play when it comes to inflation. We will see that inflation, perceived inflation and expected inflation are three very different notions. William also looks at relative prices and absolute prices and discusses how the Covid-19 pandemic has affected prices and the nature of demand. Lastly, he will look at the possible impact of the pandemic on the strategy of central banks in terms of monetary policy over the coming years.
Support measures and recovery plans in emerging and developed countries 7/10/2020
To address the economic crisis, governments and monetary authorities have implemented a broad range measures, sometimes moving beyond what had been expected. The central banks of certain developing economies have cautiously started a quantitative easing programme, whereas the main central banks of the developed countries have again turned massively to QE.
Money supply and the risk of inflation 7/10/2020
The central banks’ massive liquidity injections raise fears – at least theoretically – of an upsurge in inflation. How likely is this? Given the size of the quantitative easing measures which have been announced and the subdued outlook for inflation, central bank balance sheets are unlikely to be scaled back any time soon.
Prospects of a recovery in the months ahead 7/10/2020
Activity and confidence indicators show a rebound has started but this could create an illusion that the economy is stronger than expected. Faced with pervasive uncertainty, the recovery is bound to be gradual.
COVID-19: Key measures taken by governments and central banks 6/17/2020
Major economic policy responses have been introduced to try to attenuate the impact of the Covid-19 pandemic on the economy. This document reviews the key measures taken by central banks and governments in a large number of countries as well as those taken by international organisations. It includes measures that were introduced through 15 June. It will be updated regularly.
The COVID-19 recession: this time is really different 5/22/2020
Across time and countries, financial crises and, more broadly, recessions and recoveries, have had much in common. Recessions predominantly impact the demand side whereas the influence on the supply side is more limited. This time is different. The pandemic-induced recession will have a longer lasting influence on the allocation of household expenditures, if not on the level of spending.  More than a normal recession, it will also have major repercussions on the supply side, through changes in global value chains, working from home or the disruption of the economics of businesses which are confronted with a forced capacity reduction on social distancing grounds.
In front of Covid-19 crisis, is there a place for any “green deal”? 5/15/2020
In front of the Covid 19 crisis, the necessary support to economy should not be opposed, but associated,  to energy transition.
Central bank balance sheet expansion: the sky is not the limit 4/30/2020
Major central banks have stepped up their efforts to attenuate the economic impact of the pandemic, raising the question whether there is a limit to balance sheet expansion. An asset purchase program (QE) can continue for a long time, given the possibility to broaden the investable universe. Quite likely, asset price distortions and concern about the riskiness of the central bank balance sheet will act as the true constraint. For this reason, a central bank could decide to finance the budget deficit directly, considering that this should have a bigger growth impact for a given expansion of the balance sheet. The real challenge under such a strategy is to keep inflation under control once the output gap is closing.   
Covid-19 and public debt sustainability 4/24/2020
In many countries, the Covid-19 pandemic puts public finances under pressure with rising deficits and a decline in GDP causing a significant increase in the debt/GDP ratio

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