Browsing by Subject "ECB"

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Now showing items 1-18 of 18
  • Bank of Finland (2020)
    Bank of Finland. Bulletin 5/2020
    The worldwide economic crisis caused by the corona pandemic peaked in March 2020. In the early part of the year both output and consumption contracted suddenly and strongly; in other words, goods and services were both produced and consumed considerably less than before. The global economy is forecast to contract in the current year by around 4–6%, and the euro area economy by around 8–10%. Prior to the corona crisis, in 2019 the economy grew 2.9% globally, and 1.3% in the euro area. In the current year, the euro area economy would appear to be diving slightly deeper than the US economy, but the pace of recovery for both is very uncertain. Unemployment is growing, but in the euro area sudden mass unemployment has been avoided through the deployment of furloughs and various support measures.
  • Eskelinen, Maria; Kortela, Tomi (2017)
    Bank of Finland. Bulletin 4/2017
    By promising low interest rates in the future, a central bank can provide stimulus for the economy today. The effectiveness of this kind of forward guidance can be assessed by the impact it has on market expectations regarding interest rates. This article examines how successful the forward guidance of the ECB has been in steering market expectations.
  • Välimäki, Tuomas (2021)
    Bank of Finland Bulletin. Blog
    The symmetry of the guideline for the monetary policy stance has recently attracted considerable attention in central banks’ communications. Both the Fed and the ECB have, in their recent strategy reviews, laid out that their preferences are symmetric about the inflation target of 2%. Indeed, the calibration of the inflation target was a key part of the ECB’s strategy review that was published in July.
  • Rehn, Olli (2020)
    Bank of Finland. Bulletin 5/2020
    The lockdown measures introduced to contain the global health crisis posed by the coronavirus pandemic led to a sharp contraction in economic activity during the second quarter of 2020. The world economy has already entered a fragile recovery, but one that will take a long time.
  • Oinonen, Sami; Virén, Matti (2021)
    Economia Internazionale / International Economics 2
    Published in BoF DP 24/2018 http://urn.fi/URN:NBN:fi:bof-201811202136
    In this paper, we examine how professional forecasters’ expectations and expectation uncertainty have reacted to the ECB’s interest rate and non-conventional monetary policy decisions during the period 1999-2017. The analysis makes use of a conventional intervention dummy -type set up. The results indicate that expectations have been sensitive to policy actions, but forecasters’ reactions are quite different and, as a rule, do not seem to follow the predictions of a standard New Keynesian model. Also the relationship between inflation and output forecasts does not seem to follow a Phillips curve relationship. Rather, the forecasters interpret policy actions as signals of ECB’s inside information. Thus, for instance, cuts in policy rates are interpreted as the CB’s information of worse than generally assumed cyclical situation rather than the eventual positive effects of lower interest rates. The magnitude of expectation effects depends much of the way in which other macro variables are controlled. Even so the basic feature of these effects remain the same.
  • Oinonen, Sami; Paloviita, Maritta; Viren, Matti (2018)
    Bank of Finland Research Discussion Papers 24/2018
    Published in Economia Internazionale / International Economics 2 ; 2021.
    In this paper, we examine how professional forecasters’ expectations and expectation uncertainty have reacted to the ECB’s interest rate decisions and non-conventional monetary policy measures during the period 1999-2017. The analysis makes use of a conventional dif-in-dif type set up with different time series tools. The results indicate that expectations have been sensitive to policy actions, but all forecasters’ reactions do not seem to follow the basic predictions of a standard New Keynesian model. Also the relationship between inflation and output forecasts does not seem to follow a Phillips curve type relationship. Moreover, short- and long term reactions to policy are often weakly related and of different sign. Interestingly, subjective forecast uncertainty measures are very sensitive to policy measures. Thus, there seems to be much heterogeneity in forecasters’ reactions to most policy decisions. All uncertainty measures, including long-term inflation uncertainty, have increased over time. This has to be taken into account when considering the anchoring of inflation expectations to the inflation target.
  • Hellström, Jenni (2015)
    Bank of Finland Bulletin. Blog
    In exceptional circumstances, Eurosystem central banks can also grant credit to banks outside monetary policy operations.
  • Bank of Finland (2015)
    Bank of Finland. Bulletin 4/2015
    Monetary policy in the euro area has been highly accommodative in recent years. The accommodative stance has also been reflected in banks’ lending rates. The transmission of monetary policy has become more effective, following the strengthening of the euro area banking system and the improvement in banks’ capital adequacy from previous years.
  • Bank of Finland (2018)
    Bank of Finland. Bulletin 1/2018
    The growth outlook for the global economy is strong. Growth is supported by a synchronized expansion in several key economic regions, accommodative monetary policy, and fiscal stimulus in the United States. China continues to pursue rapid growth, while the accumulation of debt continues. Growth is reducing economic slack in several countries simultaneously, leading to a gradual increase in inflationary pressures. If favourable developments continue, monetary policy in key countries is expected to tighten gradually.
  • Bank of Finland (2017)
    Bank of Finland. Bulletin 4/2017
    Global economic growth is broadly based and brisk in the current year. World trade, in turn, is experiencing a growth spurt. At the same time, inflation remains subdued. After an upward spike stemming from oil prices at the turn of the year, inflation has moderated again globally.
  • Liikanen, Erkki (2015)
    Bank of Finland. Bulletin 4/2015
    The outlook for the global economy weakened during summer 2015. The sudden slowdown in economic growth in China was reflected in a considerable weakening of global stock markets and rising long-term interest rates. The global economy has also been affected by uncertainty about the timing of the US Federal Reserve’s monetary policy tightening. Capital inflows shifting into capital outflows from emerging economies has impaired their prospects. In the euro area, growth has been held back by the weakness of the Greek economy.
  • Laine, Olli-Matti; Nelimarkka, Jaakko (2021)
    Bank of Finland. Bulletin 4/2021
    During the COVID-19 pandemic, monetary policy securities purchases and policies to support bank lending have helped us avoid a deeper recession and deflation in the euro area. As a consequence of the securities purchases, GDP has, based on our model calculations, grown around 2 percentage points faster annually and inflation has been around 0.5 of a percentage point faster in 2020 and 2021. In a similar manner, refinancing operations to support bank lending during the pandemic have boosted annual GDP growth by around 0.5 of a percentage point and inflation by around 0.2 of a percentage point. Without the securities purchases, GDP would at the end of 2021 be around 3.5% and consumer prices around 1% lower. By the end of 2021, the refinancing operations will have boosted GDP by around 1% and consumer prices by around 0.3%.
  • Ambrocio, Gene (2021)
    Bank of Finland Bulletin. Blog
    Should monetary policy concern itself with financial stability? If yes, how should it do so? These are some of the questions tackled in the recently concluded monetary policy strategy review by the European Central Bank (ECB).[1] This is an important topic, central to many of the challenges that the Eurosystem has faced since the previous review in 2003. In what follows, I cover some of the major findings on monetary policy and financial stability.
  • Välimäki, Tuomas (2015)
    Bank of Finland Bulletin. Blog
    The existence of a lower bound for nominal interest rates complicates the monetary policy. Central banks have lately tried to circumvent this problem by applying non-standard monetary policy measures.
  • Paloviita, Maritta; Haavio, Markus; Jalasjoki, Pirkka; Kilponen, Juha; Vänni, Ilona (2020)
    Bank of Finland Research Discussion Papers 12/2020
    Published in VoxEU 28.7.2020 https://voxeu.org/article/reading-between-lines-ecbs-introductory-statements
    We apply textual analysis to extract the tone (sentiment) from the introductory statements to the ECB’s press conferences regarding economic outlook. By combining this information with Eurosystem/ECB staff macroeconomic projections, we are able to directly estimate the Governing Council’s loss function. Our analysis suggests that prior to the new monetary policy strategy announced in July 2021, the de facto inflation aim of the ECB may have been considerably below 2%. We also find evidence that the loss function has been asymmetric, which would mean that the ECB has been more averse to inflation above 2% than below 2%. The ECB’s new definition of price stability implies a symmetric loss function with a bliss point at 2.0%. Hence our results indicate that the new strategy will bring about a clear change in the Governing Council’s policy preferences.
  • McClung, Nigel (2021)
    Bank of Finland Bulletin. Blog
    As a part of their recent monetary policy strategy review, the ECB set up a workstream for the purpose of reviewing interactions between monetary and fiscal authorities in the euro area. The findings of this workstream were published in the form of an Occasional Paper on 21 September.
  • Nelimarkka, Jaakko; Laine, Olli-Matti (2021)
    BoF Economics Review 4/2021
    We assess the macroeconomic impact of pandemic-related monetary policy measures of the ECB. Conditioning on counterfactual interest rate paths that would have materialised in the absence of the policies, the macroeconomic effects are measured using structural vector autoregressions. In the framework, multiple monetary policy measures may simultaneously be analysed. According to our results, the asset purchase programmes implemented during the crisis have increased the annual GDP growth by approximate 2 percentage points in 2020–2021 and inflation by 0.5 percentage points. The longer-term refinancing operations have contributed positively but more mildly to the economic activity.
  • Kilponen, Juha (2018)
    Bank of Finland Bulletin. Blog
    Inflation-targeting central banks adjust their interest rates in response to inflation. If inflation is well below target and monetary policy is credible, consumers and investors should expect interest rates to fall. If, instead, inflation is above target, they should place a high probability on interest rates being hiked in the near future.