Search

How do natural and man-made disasters faced by central bankers in their impressionable years influence their decision-making? Using data on a large panel of central bankers from developing and developed countries, we find that central bankers who have experienced a larger number of natural as well as man-made disasters tend to act in a more conservative way. In particular, the experience of famines is the most traumatizing and influential. The results are robust to the inclusion of control variables and alternative measures of disasters, and reveal strong behavioural differences when comparing before and after the 2008 financial crisis. JEL codes: E02; E58; E71; 01 [ABSTRACT FROM AUTHOR]

We demonstrate that even though during WWII the interest rate was close to zero supporting the financing of the military effort, dissent inside the FOMC occurred with a similar frequency to other policy episodes. Our analysis highlights that the debates which resulted in dissents turned around two broad issues: the size of the Fed's balance sheet as well as the functioning of and communication with financial markets. Thus, we argue that the conventional view depicting the Fed as merely accommodating treasury needs should be revised. Our detailed investigation of dissents emphasises the modernity of the objections raised by Fed officials. [ABSTRACT FROM AUTHOR]

The recent crisis has given rise to proposals for the creation of a European unemployment insurance system. We simulate an EU-wide mechanism under various scenarios, varying methods of financing (common or country-specific contribution rates) and triggers for pay-outs (all time or contingent clauses). We analyse the impact of the system using different measures of stabilization under different fiscal multipliers. A system operating during bad times (periods where the increase in unemployment is large) would reduce GDP growth variability but also growth correlation among member countries. Hence, there is a trade-off between stabilization and synchronization of national business cycles. [ABSTRACT FROM AUTHOR]

This study examines the relationship between bank transparency and efficiency. Using a unique data set for Russian banks, we find that transparency is important and that, among the dimensions of transparency, the transparency in board and management structure and process represents the most significant determinant. These results are controlled for size effects, the structure of liabilities, the structure of assets, and nonperforming loans. This highlights the role of transparency in improving efficiency, particularly in transition economies. [ABSTRACT FROM AUTHOR]

We contrast the influence of demography and Central Bank Independence (CBI) on inflation. The recent demographic trends in developed countries are shown to weight more on inflation than CBI, while the contrary stands for the period from 1960 to 1979. [ABSTRACT FROM AUTHOR]