Of Interest/ESG News
you are currently viewing::IMF Working Papers-Inflation Targeting and the Legacy of High InflationApril 11, 2025-Summary We propose a model that diverges from existing IT workhorse models by adding path-dependence (to a forward-looking model) and potentially imperfect central bank credibility. We show that achieving low inflation (hitting the target) requires more aggressive monetary policy, and is costlier from an output point of view, when individuals' past inflationary experiences shape their inflation expectation formation. In turn, we provide empirical evidence of the need for these two theoretical additions. Countries that experienced a high level of inflation before adopting the IT regime tend to respond more aggressively to deviations of inflation expectations from the central bank's target. We also point to the existence of a credibility puzzle, whereby the strength of a central bank's monetary policy response to deviations from the inflation target remains broadly unchanged even as central banks gain credibility over time. Put differently, a country’s inflationary past casts a long and persistent shadow on central banks. Source: IMF.org |
Trump's latest global tariffs, announced on a self-proclaimed 'Liberation Day', will likely cause sharp short-term trade declines-and a significant surge in inflation for the US
March 3, 2025—On 2 April 2025 - his self-proclaimed 'Liberation Day' - President Donald Trump once again announced new tariffs. This time, all US trade partners will face a minimum 'discounted reciprocal tariff' of 10%. For countries with trade surpluses deemed guilty of 'currency manipulation and trade barriers', tariffs could rise to nearly 50%. Southeast Asian export-driven economies will particularly be affected. Major trading partners-such as China (34%), the EU (20%) and Japan (24%)-will face intermediate rates, although they are extremely high by historical standards.
WTO and OECD release expanded dataset on trade in services covering over 200 economiess
February 17, 2025-New data on bilateral trade in services covering over 200 economies from 2005 to 2023 was released by the WTO and the Organisation for Economic Co-operation and Development (OECD) on 17 February.
OECD Services Trade Restrictiveness Index Policy Trends up to 2025
February 12, 2025- Abstract
The OECD Services Trade Restrictiveness Index (STRI) provides annually updated, comparable information on regulations affecting trade in services across 51 countries and 22 sectors from 2014 to 2024.
The Economic Costs of Temperature Uncertainty
January 24, 2025--Summary
Beyond its environmental damage, climate change is predicted to produce significant economic costs. Combining novel high-frequency geospatial temperature data from satellites with measures of economic activity for the universe of US listed firms, this article examines a potentially important channel through which global warming can lead to economic costs: temperature uncertainty.
