Research Brief
This publication by the Bundesbank Research Centre provides regular news about recent studies and discussion papers by Bundesbank research economists.
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© Mitch Shark /Adobe StockHouseholds’ Expectations and Unintended Consequences of Policy Announcements Research Brief | 34th edition – November 2020
Announcements of policy actions may influence households’ expectations about future individual and aggregate economic outcomes. We show that households have lowered their expectations with regard to the economic situation and that uncertainty about the economy increased during the initial stage of the COVID-19 pandemic. We also show that households who received information on stabilizing monetary and fiscal policy measures, surprisingly, become more pessimistic concerning their future income and GDP growth.
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© bankoo / FotoliaHow (not) to calculate currency misalignment Research Brief | 33rd edition – June 2020
What is the appropriate exchange rate at which neither domestic nor foreign firms gain an unfair competitive advantage? A new study examines whether the estimation methods currently being used are conducive to answering this question. It turns out that this is often not the case.
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© Bernd Wüstneck / dpaHigher wages in Germany do not materially reduce trade imbalances Research Brief | 32nd edition – March 2020
Can wage hikes in Germany contribute to a reduction in global trade imbalances? A new study answers this question. Applying a general equilibrium model, it shows that, although wage hikes in Germany reduce the country’s trade surplus, the quantitative effects are relatively small and depend on the European Central Bank’s monetary policy response.
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© Alexander Hassenstein / Getty ImagesHow expectations of households and firms can impact the effectiveness of central bank communication Research Brief | 31st edition – February 2020
Recently, many central banks have begun communicating not just their current monetary policy, but also its probable predicted future path. However, the effectiveness of this communication hinges on how strongly it is able to influence the inflation expectations of households and firms. A standard property of macroeconomic models is that expectations respond very strongly to such announcements. A new theoretical study shows that the effects are much smaller in a model capable of matching survey evidence on expectations formation.
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© Wilfried Krecichwost / Getty ImagesReasons for the low homeownership rate in Germany Research Brief | 30th edition – January 2020
Germany has the second lowest share of homeowners of all OECD countries. This is driven by housing policies that produce incentives to rent. New studies show that alternative policies could increase the homeownership rate and reduce wealth inequality.
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© picture alliance / Geisler-FotopressPrice trends over the product life cycle and monetary policy Research Brief | 29th edition – October 2019
Consumer goods prices systematically depend on product age. A new study analyses this dependence and shows that it plays an important role in aggregate inflation and the optimal inflation rate.
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© Tom Grill / Getty ImagesConnectedness between exchange rates: how machine learning opens up fresh insights Research Brief | 28th edition – September 2019
Are the exchange rates between certain currencies more closely connected than those of other currencies? Answers to this question can be provided by econometric methods. A new study shows how machine learning can deliver useful insights into this issue.
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© Guy Vanderelst / Getty ImagesOn the reference indicator for determining the Basel III countercyclical capital buffer Research Brief | 27th edition – July 2019
The global financial crisis was a lesson that it is not enough to merely monitor the stability of individual banks – the stability of the banking sector as a whole is also a crucial factor, which is precisely what the countercyclical capital buffer (CCyB), a key instrument under the Basel III regime, is there to help safeguard. However, recent research indicates that adhering too strictly to the reference indicator envisaged under the Basel III framework might lead to a situation in which supervisors activate the CCyB either too late or not at all ahead of a future financial crisis.
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© Giulia Carbonaro/ European Central BankWhy ECB announcements move markets Research Brief | 26th edition – June 2019
Whenever financial markets react to ECB Governing Council meetings, the explanation seems obvious: the Governing Council surprised markets, for instance, by changing its policy rate or by hinting at a future rate change. Any market reaction would thus stem from unexpected announcements about monetary policy. The response of different asset prices such as bond yields and stock prices, however, often contradicts this simple explanation. A new study indicates that these seemingly puzzling reactions are driven by information about the economic outlook that the ECB reveals via its announcements.
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© Corbis Fancy / FotoliaMore stability through liquidity regulation Research Brief | 25th edition – May 2019
Regulatory requirements for banks are often criticised as having an adverse impact on lending and hence, indirectly, on the real economy. A new research paper uses a theoretical partial equilibrium model to study the direct effects a liquidity coverage ratio could have on banks’ loan supply.