In surveys with information provision experiments, researchers can observe how people change beliefs, and sometimes also actions, after having been confronted with information. This article interprets information provision experiments from the perspective of the theory of rational inattention, discussing what survey findings tell us about economic behaviour outside the survey and deriving implications for central bank communication.
Vitaly M. Bord, Agnes Kovacs, and Patrick MoranIn the United States, credit card companies frequently use machine learning algorithms to proactively raise credit limits for borrowers. In contrast, an increasing number of countries have begun to prohibit credit limit increases initiated by banks rather than consumers.
This paper assesses the environmental performance of sustainability-related investment funds compared to conventional ones across three dimensions: financed activities, portfolio carbon footprint, and investment in firms with ambitious science-based targets. We identify ESG funds using Morningstar (MS) strategies, the Sustainable Finance Disclosure Regulation’s Article 8/9 classification, and funds’ self-naming. We find that the greenest funds invest more in low-carbon sectors, but their carbon footprints are comparable to conventional funds.
The COVID-19 pandemic and Russia’s invasion of Ukraine have complicated macroeconomic forecasting and policymaking due to unprecedented disruptions in supply chains and energy markets, suggesting a new macroeconomic regime. However, we are unable to reject the null hypothesis of no structural break in March 2020. We then examine whether these shocks have increased post-COVID-19. Their sizes were initially elevated, but then have been gradually returning to pre-pandemic levels.
The Bank of England is today announcing some changes to the financing of its foreign exchange reserves.
This paper introduces the European Central Bank’s Multi Country model (ECB-MC), a coherent macroeconomic framework designed to support economic forecasting and policy analysis within the Eurosystem. The ECB-MC captures the economic dynamics of the five major economies in the euro area – Germany, France, Italy, Spain, and the Netherlands – which account for more than 80 percent of the euro area total GDP.
The Prudential Regulation Authority (PRA) has today announced proposals to reduce regulatory requirements for banks by deleting 37 individual reporting templates.
This article details a consultation to discontinue the collection and publication of statistical data via Form BN on the further sectoral breakdown of non-resident monetary financial institutions. It also outlines existing alternative sources of non-resident data available in Forms CC and CL which can be used to substitute Form BN data, albeit on a quarterly rather than monthly frequency.
Daniel O. Beltran and Julio L. OrtizWe explore differences in the dynamics of core inflation between Europe and North America using a Bayesian time series filter that decomposes the level of core inflation in the major advanced economies into regional, global, and country-specific components. We find a prominent role for both regional and global factors. Historically, the two regional components have at times diverged.
Manuel González-Astudillo, Diego VilánA challenge for conducting monetary policy in a currency union is the diverse economic conditions among member states. Such disparities can drive natural interest rates apart, thereby undermining the stabilizing role of a unified monetary policy.
