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  • Bank of Finland (2014)
    Bank of Finland. Bulletin. Monetary policy and the global economy 4
    Monetary policy and the global economy 3 Marko Melolinna The need for and impacts of structural policy in the euro area 39 Eeva Kerola Why are euro area banks' credit standards still tight? 53 Minna Kuusisto - Elisa Newby Implementation of monetary policy at the zero lower bound - and below 67
  • (2012)
    Bank of Finland. Bulletin. Monetary policy and the global economy 4
    Monetary policy and the global economy 3 Hanna Freystätter Bursting of the housing price bubble and the economic policy challenges for Spain 37 Juha Kilponen Fiscal policy cyclicality and sovereign risk premia 49 Heli Simola How have emerging economies changed global price trends? 59
  • (2013)
    Bank of Finland. Bulletin. Monetary policy and the global economy 1
    Monetary policy and the global economy 3 Juha Kilponen - Jarmo Kontulainen - Antti Suvanto Financial crisis and monetary policy targets 35 Mika Kortelainen Global integrated monetary and fiscal model 49 Laura Solanko - Lauri Vilmi The transformation of global energy markets 57
  • (2012)
    Bank of Finland. Bulletin. Monetary policy and the global economy 1
    Monetary policy and the global economy 1 Harri Hasko Monetary policy transmission and debt accumulation in the euro area 29 Samu Kurri Euro area economic policy coordination: what has been done, and why? 39 Lauri Vilmi Quantitative easing of monetary policy 53
  • (2011)
    Bank of Finland. Bulletin. Monetary policy and the global economy 4
    Monetary policy and the global economy 1 Helvi Kinnunen and Maritta Paloviita Fiscal policy responses of euro area countries to the economic crisis 27 Tuomas Välimäki Central banking and balance sheet risks 37 Juhana Hukkinen and Karlo Kauko Macroprudential policy tools 49
  • (2013)
    Bank of Finland. Bulletin. Monetary policy and the global economy 4
    Monetary policy and the global economy 3 Hanna Freystätter - Hanna Putkuri - Jukka Vauhkonen Financial cycles, monetary policy and macroprudential policy in the euro area 35 Karlo Kauko Liquidity regulation makes a comeback 49 Pasi Ikonen - Tuomas Saarenheimo - Matti Virén Fiscal multipliers revisited 59 Elisa Newby Foreign trade statistics based on value added challenge the traditional picture of international trade 65
  • (2014)
    Bank of Finland. Bulletin. Monetary policy and the global economy 1
    Monetary policy and the global economy 3 Juhana Hukkinen Economic policy options in conditions of weak growth and low inflation 41 Tuomas Välimäki Two targets, one instrument: steering interest rates and preserving financial stability with Eurosystem credit operations 53 Niko Herrala - Seija Parviainen Japan's inflation expectations as a measure of the success of Abenomics 63
  • Freystätter, Hanna (2012)
    Bank of Finland. Bulletin. Monetary policy and the global economy 4
    The wealth shock caused when the housing price bubble burst in Spain will have strong, long-lasting effects. As a consequence of the bursting of the bubble, financial factors (such as weaker balance sheets and higher costs of funding) weigh on the investment and consumption potential of companies and households. In this article, we use a model simulation to illustrate the procyclical effect of financial factors on the economic downswing in Spain. The economic programme of the country must be based on a realistic assessment of economic development that captures the significant and long-term negative growth contribution of financial factors. Economic policy measures should be adopted to avert the threat of balance sheet recession facing Spain and avoid any permanent effects of the crisis on the output potential of the economy.
  • Välimäki, Tuomas (2011)
    Bank of Finland. Bulletin. Monetary policy and the global economy 4
    The main risks of central banking are always related to the success of the policy implemented, ie whether the decisions made lead to price stability and whether other economic policies can be supported without prejudice to price stability. Central banking is also associated with financial risks. These are relevant particularly in situations marked by destabilising developments on the financial markets and in the economy and by central bank interventions in foreign exchange, money or capital markets. Although financial returns are not a primary central bank objective, financial independence is a prerequisite for an effective conduct of monetary policy aimed at maintaining price stability. This article examines the financial risks involved in Eurosystem activities from the perspective of developments in the Eurosystem balance sheet.
  • Hukkinen, Juhana (2014)
    Bank of Finland. Bulletin. Monetary policy and the global economy 1
    Five years have now passed since the most acute phase of the financial crisis. Despite substantial monetary and fiscal policy measures to stimulate the economy, the global recovery has been fragile and uneven. During the course of 2013, recovery finally got underway in the euro area, too, and economic activity is slowly reviving. With the weak economic trajectory, inflation has come down to a very low level, and the pace of change in relative prices has faded. Low inflation and the rigidity of relative prices suggest recovery from the financial crisis will continue to be slow. This article examines the economic policy alternatives in conditions of weak growth and low inflation. The sluggish performance of the post-financial-crisis euro area economy in the years 2009-2013 is modelled using a dynamic stochastic general equilibrium (DSGE) model developed at the IMF.1 Understanding the causes of slow growth and weakening inflation will provide a basis for future policy choices. The article also examines structural, fiscal and monetary policy options for boosting the pace of economic growth. Based on our observations, no single policy alternative will on its own suffice to close the output gap. If we really want to accelerate recovery from the financial crisis, all segments of economic policy must be harnessed.
  • Kurri, Samu (2012)
    Bank of Finland. Bulletin. Monetary policy and the global economy 1
    During the past year, the leaders of EV Member States and the European Parliament have reached agreement on a number of important reforms to enhance economic policy coordination. There have been numerous decisions following each other at rapid speed. This article examines the renewed framework for economic policy cooperation in the euro area and shows how the different agreements fit together.
  • Kilponen, Juha; Kontulainen, Jarmo; Suvanto, Antti (2013)
    Bank of Finland. Bulletin. Monetary policy and the global economy 1
    The prolonged financial market and sovereign debt crisis has stimulated increased research into economic policy measures and their effectiveness. In monetary policy, the zero lower bound has brought about new non-standard measures as well as forward-looking communication on future accommodation. The aim of such forward guidance is to generate expectations that policy is going to remain accommodative for some time. With the financial crisis, there is also fresh interest in price level and nominal income targeting as alternatives to inflation targeting.
  • Freystätter, Hanna; Putkuri, Hanna; Vauhkonen, Jukka (2013)
    Bank of Finland. Bulletin. Monetary policy and the global economy 4
    Countercyclical macroprudential policy is to be strengthened in the euro area. The European Central Bank will be assuming new macroprudential powers, as single banking supervision commences in autumn 2014 and the countercyclical buffer requirement is due to be introduced in all euro area countries no later than the beginning of 2016. Even so, a significant part of euro area macroprudential policy will continue in the future to be the responsibility of national authorities. In the operating environment of the single monetary policy, euro area Member States will be able to support their own and the area s economic stability and to improve the financial system s resilience to crises through pursuing robust national macroprudential policies.
  • Ikonen, Pasi; Saarenheimo, Tuomas; Virén, Matti (2013)
    Bank of Finland. Bulletin. Monetary policy and the global economy 4
    During the past year, there has been intense debate over the correlation between fiscal consolidation and economic growth. This article argues that the observed growth forecast errors for euro area countries in 2010 2011 were not caused by underestimated fiscal multipliers. Instead, the errors were due to a general reassessment of euro area sovereign risk, which disproportionately impacted the more vulnerable euro area countries. These countries experienced a sharp increase in their sovereign borrowing costs, a tightening of credit conditions and ultimately a sharper-than-expected contraction of domestic demand.
  • Kilponen, Juha (2012)
    Bank of Finland. Bulletin. Monetary policy and the global economy 4
    A countercyclical fiscal policy is beneficial to the economy, as it smoothes out business cycle fluctuations and reduces government debt servicing costs. If, on the other hand, fiscal policy is procyclical, this hampers the capacity of monetary policy to foster macroeconomic stability. This being the case, decisions by euro area member countries that enhance fiscal discipline will increase stability in the euro area.
  • Kinnunen, Helvi; Paloviita, Maritta (2011)
    Bank of Finland. Bulletin. Monetary policy and the global economy 4
    The euro area countries have attempted to use fiscal policy to constrain changes in output, employment and incomes that derive from business-cycle fluctuations. That is to say, policies have been counter-cyclical. During the crisis, policy responded more actively than before to cyclical changes in the economy, as the longer-term goals for public finances were partly put on hold in favour of business-cycle policy. Forecast errors concerning the euro area countries and subsequent data revisions were considerably larger during the crisis than in the earlier years. Economic uncertainty at the time of decision making substantially impacted fiscal plans and their implementation during the recession years.
  • Newby, Elisa (2013)
    Bank of Finland. Bulletin. Monetary policy and the global economy 4
    Foreign trade statistics based on value added follow the value added by each country and sector through the different phases of the production process. A new database maintained by the OECD and WTO provides a different picture of the imbalances in trade flows between the major economic regions and the interdependency of imports and exports than that provided by traditional customs statistics. This article also examines imbalances in euro area trade on a value-added basis. Statistics based on value added do not displace the traditional gross foreign trade statistics, but offer an alternative way to examine the importance of foreign trade, particularly for those countries that are integrated into global value chains.
  • Kortelainen, Mika (2013)
    Bank of Finland. Bulletin. Monetary policy and the global economy 1
    The Bank of Finland has adopted a new model of the international monetary and financial economy developed at the International Monetary Fund (IMF) for the analysis of political changes and shocks to the global economy. This article provides an introduction to the structure and key assumptions of the model and illustrates its properties through a more detailed presentation of the risk scenario discussed in the article 'Monetary policy and the global economy' (above).
  • Schauman, Heidi; Taipalus, Katja (2011)
    Bank of Finland. Bulletin. Monetary policy and the global economy 1/2011
    The events of recent years have shown how weak the management of systemic risk in the global economy really is. In addition to prudential supervision of individual institutions and market participants, what is desperately needed are policies that address the stability of the system as a whole. The definition and supervision of macrostability have rapidly emerged as one of the key areas of policy development for the future. This work is, however, in its infancy, and the necessary concepts have not yet become firmly established.1 In this article we consider the principles that should underpin the prudential supervision of macroeconomic imbalances and macrostability so that in future we can identify crises early enough to be able to minimise their spread.
  • Simola, Heli (2012)
    Bank of Finland. Bulletin. Monetary policy and the global economy 4
    The global economic crisis has kept domestically generated inflation pressures at moderate levels in advanced economies in recent years. As a consequence of the crisis, abundant spare production capacity has been available and domestic demand has been slow to regain momentum. By contrast, in many emerging economies, inflation has picked up markedly since 2009, as these economies suffered from the crisis considerably less and have recovered quickly. Due to the substantial rise in the weight of emerging economies in the world economy during the last decade, these countries also have a significant impact on global inflation. This article aims to outline the magnitude, channels and longer-term trends of this impact.