Tag Archives: Contributions

In a CEPR discussion paper, Christoph Trebesch and Jeromin Zettelmeyer argue that ECB bond buying had a large impact on the price of short and medium maturity bonds … However, the effects were limited to those sovereign bonds actually bought. We find little evidence for positive effects on market quality, or spillovers to close substitute bonds, CDS markets, or corporate bonds. A multiple equilibria view of the crisis would probably suggest otherwise.

In the NZZ, Peter Fischer reports that SNB president Thomas Jordan rejects the Vollgeld initiative and stops short of endorsing the ‘reserves for all’ proposal. … wehrt sich die Nationalbank auch gegen Vorschläge aus akademischen Kreisen, die von der Nationalbank fordern, nicht mehr nur Banken, sondern auch direkt den Schweizer Bürgern elektronisches Zentralbankgeld zur Verfügung zu stellen. Am einfachsten ginge dies,...

In the NZZ, Peter Fischer reports that SNB president Thomas Jordan rejects the Vollgeld initiative and stops short of endorsing the ‘reserves for all’ proposal. … wehrt sich die Nationalbank auch gegen Vorschläge aus akademischen Kreisen, die von der Nationalbank fordern, nicht mehr nur Banken, sondern auch direkt den Schweizer Bürgern elektronisches Zentralbankgeld zur Verfügung zu stellen. Am einfachsten ginge dies, wenn jedermann bei der SNB ein Konto halten könnte. Jordan warnt...

Finanz und Wirtschaft, December 13, 2017. PDF. Ökonomenstimme, December 15, 2017. HTML. Regulation is about aligning private and social trade-offs. When banks cause negative externalities, good regulatory interventions increase banks’ costs. Externalities may differ across countries, so nothing suggests that regulation induced costs should be the same internationally.

It’s the time of the year when financial advisors feel obliged to produce forecasts for the coming year. This is often a waste of time, for the writers and the readers. In the Wall Street Journal, James Mackintosh writes that [f]orecasting is difficult, but this year showed exactly how pointless it can be: Markets performed opposite of virtually all predictions. Previous blog post.

NZZ, November 16, 2017. PDF. Ökonomenstimme, November 20, 2017. HTML. On money creation. Some misconceptions. Why money is less special than commonly thought.

In the Boston Review, Dani Rodrik discusses neoliberalism and argues that mainstream economics shades too easily into ideology, constraining the choices that we appear to have and providing cookie-cutter solutions. Rodrik emphasizes that sound economics implies context specific policy recommendations. And therein lies the central conceit, and the fatal flaw, of neoliberalism: the belief that first-order economic principles map onto a unique set of policies, approximated by a...

An excellent conference organized by the Monetary Law Forum Switzerland focused on blockchain use cases from a central bank perspective. Program, links to slides. I discussed the macroeconomic perspective and argued for “reserves for all.” Some related links: Nivaura and Allen & Overy (backing Nivaura). OTC Swiss Blockchain, by Roman Bischoff.

On his blog, John Cochrane argues that banks could, and should be 100% equity financed. His points are: (1) There are plenty of safe assets—government debt—out there and banks do not need to “create” additional safe assets—deposits. I share this view partly. First, I don’t know what amount of safe assets are sufficient from a social point of view. Second, I don’t consider government debt to be a safe asset. Third, debt has safety and liquidity properties. The question is not only whether...

In an NBER working paper and a column on VoxEU, Michael Bordo and Andrew Levin make the case for central bank issued digital currency (CBDC). Bordo and Levin favor an account-based CBDC system (managed or supervised by the central bank) rather than central bank issued tokens in the blockchain. They emphasize the Friedman rule and the fact that interest paying CBDC affords the possibility to satisfy the rule: These … goals – … a stable unit of account and an efficient medium of exchange –...