Vertaisarvioidut artikkelit – Peer-Reviewed Articles (2017- )


The collection contains information about peer-reviewed articles published in academic journals by Bank of Finland researchers and research fellows. Most of the articles are available on the journal’s website and the repository contains only the metadata and link to the article.

Recent Submissions

  • Haavio, Markus; Jalasjoki, Pirkka; Kilponen, Juha; Paloviita, Maritta (2021)
    International Journal of Central Banking 2 (June)
    Published as BoF DP 29/2017
    Using unique real-time quarterly macroeconomic projections of the Eurosystem/ECB staff, we estimate competing specifications of the ECB's monetary policy reaction function. We consider specifications which include inflation and output growth projections, a past inflation gap, a time-varying natural real interest rate, and different inflation targets. Our first key finding is that the de facto inflation target of the ECB lies between 1.6 percent and 1.8 percent. Our second key finding is that the ECB reacts both to short-term macroeconomic projections and to past deviations of inflation from its de facto target.
  • He, Qing; Korhonen, Iikka; Qian, Zongxin (2021)
    International Review of Economics & Finance September ; 2021
    In emerging market economies, transmission of monetary policy through the foreign exchange market is complicated by the coexistence of financial restrictions and arbitrages. Using China as an example, we show that the coexistence of exchange rate interventions, capital controls and an on-shore-offshore exchange rate differential makes the long run equilibrium in the currency market nonlinear. Disturbances to this nonlinear long run equilibrium could offset the impact of monetary policy actions on domestic price stability. Omitting such nonlinearity leads to biased inference on the effectiveness of monetary policy.
  • Schmöller, Michaela; Spitzer, Martin (2021)
    European Economic Review May ; 2021
    BoF DP 21/2019 ("Endogenous TFP, business cycle persistence and the productivity slowdown in the euro area")
    This paper analyses the role of endogenous total factor productivity dynamics in explaining business cycle persistence as well as the missing (dis-)inflation and productivity puzzles in the euro area. We show by means of an estimated medium-scale DSGE model in which TFP evolves endogenously as the result of costly investment in R&D and technology adoption that the endogenous slowdown in total factor productivity can explain the depth and persistence of the output drop and the weak recovery following the double-dip recession in the euro area. Our results suggest that a decrease in R&D efficiency and innovation is key in explaining the pre-crisis euro area productivity slowdown, while as of 2008 a crises-induced drop in technology adoption constitutes the most important factor. We document a flattening of the Phillips curve relationship under the endogenous TFP mechanism, resulting from the interaction between inflation and productivity dynamics. The endogenous reaction in TFP dampens the inflation response over the business cycle and can thus help explain both the moderate fall in euro area inflation during its crises and its sluggish increase in the subsequent recovery.
  • Kauko, Karlo; Tölö, Eero (2020)
    Finnish Economic Papers 2
    Published also as BoF DP 6/2019
    The credit-to-GDP gap is a widely used early warning indicator of banking crises. It has become standard to calculate this trend deviation with a one-sided Hodrick-Prescott filter that uses a much larger value for the smoothing parameter λ than commonly applied in most business-cycle studies. We recalibrate the smoothing parameter with panel data covering almost one-and-a-half centuries of data. As a result, the 2008 crisis does not dominate the results and sample length helps contain filter initialization problems, i.e. most observations are preceded by decades of data. The optimal λ is found to be much lower than previously suggested.
  • Honkapohja, Seppo; Mitra, Kaushik (2020)
    Journal of Monetary Economics December
    Published also as BoF DP 5/2018
    Global learning dynamics for price-level targeting (PLT) monetary policy are analyzed and compared to inflation targeting in a nonlinear New Keynesian model. Domain of attraction of target steady state is a new robustness criterion for policy regimes. Robustness of PLT depends on whether a known target path is incorporated into learning. Credibility is measured by accuracy of this forecasting method relative to simple statistical forecasts evolving through reinforcement learning. Initial credibility and target price are key factors influencing performance. Model results are in line with the Swedish experience of price stabilization in1930’s.