UK CPI inflation in 1975 reached 25%, a period now known as the ‘Great Inflation’. This column uses a range of empirical and narrative evidence to illustrate the importance of fiscal policy in this period. While stabilising and reducing debt has been the primary peacetime fiscal policy objective for most of modern British history, this […]
Central banks facing post-pandemic inflation often considered ‘looking through’ supply shocks. Using a New Keynesian framework in which agents gradually learn whether a cost-push shock is temporary or persistent, this column shows that such look-through strategies can amplify inflation when information is incomplete. In contrast, a standard Taylor rule prevents an additional demand-driven inflation impulse […]
The pound initially edged up after the BoE’s decision, but pared those gains to trade slightly lower on the day at $1.3622. The U.S. dollar was choppy on Thursday as traders parsed the Federal Reserve’s measured stance on further interest rate cuts, while sterling held steady as the Bank of England kept rates steady and […]
Spot gold was trading around $3,680 per ounce on Tuesday after hitting a record $3,689.27 earlier in the session. Gold’s stellar rally to successive record highs shows every sign of continuing for the rest of the year, but a healthy correction is on the cards before breaching the $4,000 per ounce milestone in 2026, traders […]
History suggests that using lax monetary policy and a weaker currency to address debt sustainability is a dangerous game. This column revisits a unique early experiment with a managed float of state-issued money in Venice between 1619 and 1666. Newly digitised exchange rate data show that even for a government with a strong fiscal reputation, […]
The new US administration has made the Federal Reserve’s monetary policymaking more complicated both because of the elevated uncertainty regarding administration policies and because of the extraordinary political pressure put on the central bank. This column describes how, thus far, the Fed has followed a cautious path for policy, waiting for more information on policy […]
Following the US tariff announcements in early April, the US dollar strongly depreciated while US Treasury yields rose. This column zooms in on the April episode, analysing the co-movement of asset prices with an estimated market ‘safe-haven factor’. It shows that the co-movement of the US dollar with the ‘safe-haven factor’ changed in April, and […]
Understanding differences in firm responses to macroeconomic shocks is key for designing policy actions. This column identifies 67 macro shocks using ‘jump’ days in the US stock market over 2020-2022. It measures firm exposures using individual stock returns and, crucially, discussions of business risk factors in corporate filings. These exposures are largely uncorrelated for different […]
Economic research often treats tools such as tariffs, subsides, interest rates, monetary policy, and austerity measures as gender neutral. This column argues that when sex-disaggregated data and gender analysis are missing from models and policy decisions, the result is incomplete economic analysis and inequitable outcomes. What’s missing from economics isn’t just women’s voices, but women’s […]
The independence of monetary authorities from political interference is a foundational principle of modern central banking, and understanding whether threats to this independence affect expectations and beliefs is important. This column uses data from the Polymarket platform, where users trade on Federal Reserve interest rate decisions and possible replacement of Chair Powell, to examine how […]
