Pub Date : 2024-07-09DOI: 10.1016/j.latcb.2024.100148
Andrea Barón, Helena Rodríguez
The uncertainty implied in the transition to a low carbon economy introduces new challenges to central banks to forecast potential output, the output gap and inflation. It also poses significant challenges in terms of financial stability, to the extent that banks’ loan portfolios could be highly exposed to vulnerable sectors. We present and apply two methodologies, one emissions-based and the other sector-based, to measure Uruguay’s exposure to transition risk in terms of product, exports and credit. The results account for a relevant exposition, both from the perspective of the banking system and at a macro level. This reaffirm the necessity of integrating transition risk into the analyses and forecasts. Furthermore, there is a continued need to progress along pathways that evaluate and quantify this risk at both macroeconomic and financial levels.
{"title":"Uruguay’s banking system exposure to transition risk","authors":"Andrea Barón, Helena Rodríguez","doi":"10.1016/j.latcb.2024.100148","DOIUrl":"10.1016/j.latcb.2024.100148","url":null,"abstract":"<div><div>The uncertainty implied in the transition to a low carbon economy introduces new challenges to central banks to forecast potential output, the output gap and inflation. It also poses significant challenges in terms of financial stability, to the extent that banks’ loan portfolios could be highly exposed to vulnerable sectors. We present and apply two methodologies, one emissions-based and the other sector-based, to measure Uruguay’s exposure to transition risk in terms of product, exports and credit. The results account for a relevant exposition, both from the perspective of the banking system and at a macro level. This reaffirm the necessity of integrating transition risk into the analyses and forecasts. Furthermore, there is a continued need to progress along pathways that evaluate and quantify this risk at both macroeconomic and financial levels.</div></div>","PeriodicalId":100867,"journal":{"name":"Latin American Journal of Central Banking","volume":"6 3","pages":"Article 100148"},"PeriodicalIF":1.3,"publicationDate":"2024-07-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141708604","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-07-08DOI: 10.1016/j.latcb.2024.100147
Miguel Mascarúa , Ricardo Montañez-Enríquez
What are the aggregate consequences of policies that target adopting more efficient technologies in an economy with a large informal sector? Using a heterogeneous agents model with endogenous occupation choice between workers and formal and informal entrepreneurs and calibrated to Mexico, we found that in economies with a large informal sector, a decrease in the overall tax rate increases by more the adoption of advanced technologies than in economies with a low informal sector. Furthermore, the burden on government revenues is lower in a highly informal economy. In addition, we find that such policies are more efficient than those that target adopting more advanced technologies because they tackle two distortionary problems: the informality rate and the low adoption of advanced technologies. Such policies become relevant, as we estimate that climate change can reduce aggregate production by up to 6.6% in the long-run.
{"title":"Climate change and technology adoption with a large informal sector","authors":"Miguel Mascarúa , Ricardo Montañez-Enríquez","doi":"10.1016/j.latcb.2024.100147","DOIUrl":"10.1016/j.latcb.2024.100147","url":null,"abstract":"<div><div>What are the aggregate consequences of policies that target adopting more efficient technologies in an economy with a large informal sector? Using a heterogeneous agents model with endogenous occupation choice between workers and formal and informal entrepreneurs and calibrated to Mexico, we found that in economies with a large informal sector, a decrease in the overall tax rate increases by more the adoption of advanced technologies than in economies with a low informal sector. Furthermore, the burden on government revenues is lower in a highly informal economy. In addition, we find that such policies are more efficient than those that target adopting more advanced technologies because they tackle two distortionary problems: the informality rate and the low adoption of advanced technologies. Such policies become relevant, as we estimate that climate change can reduce aggregate production by up to 6.6% in the long-run.</div></div>","PeriodicalId":100867,"journal":{"name":"Latin American Journal of Central Banking","volume":"6 3","pages":"Article 100147"},"PeriodicalIF":1.3,"publicationDate":"2024-07-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141695166","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-07-02DOI: 10.1016/j.latcb.2024.100142
Francisco Adame-Espinosa
This paper studies the implications for optimal monetary policy associated to the wealth effects induced by stock-price dynamics within a non-Ricardian framework. We use a new Keynesian model incorporating households with perpetual youth to study whether a monetary rule responding to asset price fluctuations could find sizeable welfare improvements with respect to pursuing a policy tracking flexible price allocations. First, we find that, for different types of shocks (i.e. productivity, demand, and financial), pursuing optimal policies can provide sizeable reductions in the social welfare loss with respect to flexible price allocations. Second, we study whether a monetary policy rule tracking the natural rate and responding to asset price fluctuations can attain reductions in the welfare losses close to the magnitude found by pursuing optimal policies. We find that such a rule is effective to attain optimal outcomes when the economy faces productivity shocks and financial shocks. However, we find that such rule can attain marginal reduction in the welfare losses when the economy faces demand shocks.
{"title":"“Monetary rules, financial stability and welfare in a non-Ricardian framework”","authors":"Francisco Adame-Espinosa","doi":"10.1016/j.latcb.2024.100142","DOIUrl":"10.1016/j.latcb.2024.100142","url":null,"abstract":"<div><div>This paper studies the implications for optimal monetary policy associated to the wealth effects induced by stock-price dynamics within a non-Ricardian framework. We use a new Keynesian model incorporating households with perpetual youth to study whether a monetary rule responding to asset price fluctuations could find sizeable welfare improvements with respect to pursuing a policy tracking flexible price allocations. First, we find that, for different types of shocks (i.e. productivity, demand, and financial), pursuing optimal policies can provide sizeable reductions in the social welfare loss with respect to flexible price allocations. Second, we study whether a monetary policy rule tracking the natural rate and responding to asset price fluctuations can attain reductions in the welfare losses close to the magnitude found by pursuing optimal policies. We find that such a rule is effective to attain optimal outcomes when the economy faces productivity shocks and financial shocks. However, we find that such rule can attain marginal reduction in the welfare losses when the economy faces demand shocks.</div></div>","PeriodicalId":100867,"journal":{"name":"Latin American Journal of Central Banking","volume":"6 4","pages":"Article 100142"},"PeriodicalIF":1.3,"publicationDate":"2024-07-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145327134","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-06-24DOI: 10.1016/j.latcb.2024.100139
Miguel Sarmiento
The increasing interdependence between non-banking financial institutions (NBFIs) and the banking sector conditions the provision of liquidity in the financial markets. This paper evaluates how the market stress associated to the bankruptcy of one of the most interconnected NBFIs in an emerging market economy affected the availability and pricing of unsecured interbank funding. The results indicate that the market stress conducted to a reallocation of money market mutual funds (MMMFs) deposits within the banking sector, which affected the banks’ liquidity provision in the unsecured interbank market. Banks with an ex-ante high concentration of MMMF deposits significantly increased loan spreads and reduced the supply of unsecured funds in the interbank market. Lending relationships and central bank liquidity contributed to partially alleviate the liquidity shock. Overall, the results suggest that the concentration of uninsured depositors increases the transmission of non-bank liquidity shocks to the banking sector.
{"title":"The transmission of non-banking liquidity shocks to the banking sector","authors":"Miguel Sarmiento","doi":"10.1016/j.latcb.2024.100139","DOIUrl":"10.1016/j.latcb.2024.100139","url":null,"abstract":"<div><div>The increasing interdependence between non-banking financial institutions (NBFIs) and the banking sector conditions the provision of liquidity in the financial markets. This paper evaluates how the market stress associated to the bankruptcy of one of the most interconnected NBFIs in an emerging market economy affected the availability and pricing of unsecured interbank funding. The results indicate that the market stress conducted to a reallocation of money market mutual funds (MMMFs) deposits within the banking sector, which affected the banks’ liquidity provision in the unsecured interbank market. Banks with an ex-ante high concentration of MMMF deposits significantly increased loan spreads and reduced the supply of unsecured funds in the interbank market. Lending relationships and central bank liquidity contributed to partially alleviate the liquidity shock. Overall, the results suggest that the concentration of uninsured depositors increases the transmission of non-bank liquidity shocks to the banking sector.</div></div>","PeriodicalId":100867,"journal":{"name":"Latin American Journal of Central Banking","volume":"6 2","pages":"Article 100139"},"PeriodicalIF":0.0,"publicationDate":"2024-06-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144167230","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-06-21DOI: 10.1016/j.latcb.2024.100138
Diego Solórzano, Lenin Arango-Castillo
Using daily retail prices gathered through web scraping in Mexico, we analyse time- and state-dependent price setting rules as determinants of the duration of price spells, or the probability of price changes. Through the lens of a duration model, we find some evidence of state-dependent behaviour, which suggests that sheer time-dependent pricing models are unable to fully describe the features of the data. Specifically, we find statistically significant impacts on the probability of a price change of the COVID-19 pandemic, of variations in the nominal US/MXN exchange rate and of variations of real point of sales expenditures. Finally, leveraging price data gathered via direct visits to brick-and-mortar stores, we find that the state of the economy has similar impacts on the expected duration of price spells across both websites and physical stores.
{"title":"Price duration using daily online data: Time- or state-dependent?","authors":"Diego Solórzano, Lenin Arango-Castillo","doi":"10.1016/j.latcb.2024.100138","DOIUrl":"10.1016/j.latcb.2024.100138","url":null,"abstract":"<div><div>Using daily retail prices gathered through web scraping in Mexico, we analyse time- and state-dependent price setting rules as determinants of the duration of price spells, or the probability of price changes. Through the lens of a duration model, we find some evidence of state-dependent behaviour, which suggests that sheer time-dependent pricing models are unable to fully describe the features of the data. Specifically, we find statistically significant impacts on the probability of a price change of the COVID-19 pandemic, of variations in the nominal US/MXN exchange rate and of variations of real point of sales expenditures. Finally, leveraging price data gathered via direct visits to brick-and-mortar stores, we find that the state of the economy has similar impacts on the expected duration of price spells across both websites and physical stores.</div></div>","PeriodicalId":100867,"journal":{"name":"Latin American Journal of Central Banking","volume":"6 2","pages":"Article 100138"},"PeriodicalIF":0.0,"publicationDate":"2024-06-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144167229","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-05-31DOI: 10.1016/j.latcb.2024.100137
Jorge Pozo , Youel Rojas
The possibility of non-linear responses to conventional monetary policy interventions has been a subject of ongoing research for a considerable period. However, the existing body of literature largely concentrates on analyzing individual economies or investigates only specific facets of these non-linearities. This paper aims to contribute to the literature and study the nonlinear impact of the conventional monetary policy, in two dimensions: direction and current monetary condition. This is the monetary policy effects depend on the monetary conditions and shock direction. Using a sample of both advanced and emerging economies, we find consistent evidence of asymmetric effectiveness of monetary policy. Initial movements of the policy rate are expected to have the largest effects, in contrast to the following movements in the same direction. Thus, the effectiveness of monetary policy wanes as the monetary stance tightens (i.e., as the policy interest rate rises). Conversely, the efficacy of expansionary monetary policy weakens as the monetary stance loosens (i.e., as the policy interest rate approaches its lower bound).
{"title":"Nonlinear impact of the conventional monetary policy: A cross-country evidence","authors":"Jorge Pozo , Youel Rojas","doi":"10.1016/j.latcb.2024.100137","DOIUrl":"10.1016/j.latcb.2024.100137","url":null,"abstract":"<div><div>The possibility of non-linear responses to conventional monetary policy interventions has been a subject of ongoing research for a considerable period. However, the existing body of literature largely concentrates on analyzing individual economies or investigates only specific facets of these non-linearities. This paper aims to contribute to the literature and study the nonlinear impact of the conventional monetary policy, in two dimensions: direction and current monetary condition. This is the monetary policy effects depend on the monetary conditions and shock direction. Using a sample of both advanced and emerging economies, we find consistent evidence of asymmetric effectiveness of monetary policy. Initial movements of the policy rate are expected to have the largest effects, in contrast to the following movements in the same direction. Thus, the effectiveness of monetary policy wanes as the monetary stance tightens (i.e., as the policy interest rate rises). Conversely, the efficacy of expansionary monetary policy weakens as the monetary stance loosens (i.e., as the policy interest rate approaches its lower bound).</div></div>","PeriodicalId":100867,"journal":{"name":"Latin American Journal of Central Banking","volume":"6 2","pages":"Article 100137"},"PeriodicalIF":0.0,"publicationDate":"2024-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144167228","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-05-20DOI: 10.1016/j.latcb.2024.100136
Michel Alexandre , Felipe Jordão Xavier , Thiago Christiano Silva , Francisco A. Rodrigues
In this paper, we explore the relationship between node nestedness contribution and network stability in financial networks. We rely on data from the Brazilian interbank market. For each bank in the network, we computed the individual nestedness contribution (INC), along with two measures of systemic risk: systemic impact (SI) and systemic vulnerability (SV). The INC is computed considering the different roles played by the banks: lender and borrower. We found that borrowing banks with a higher INC would cause more damage to the network if they were hit by a shock — i.e, they have a higher SI. Moreover, lending banks with a higher INC are more vulnerable to shocks on the network.
{"title":"Nestedness and systemic risk in financial networks","authors":"Michel Alexandre , Felipe Jordão Xavier , Thiago Christiano Silva , Francisco A. Rodrigues","doi":"10.1016/j.latcb.2024.100136","DOIUrl":"10.1016/j.latcb.2024.100136","url":null,"abstract":"<div><div>In this paper, we explore the relationship between node nestedness contribution and network stability in financial networks. We rely on data from the Brazilian interbank market. For each bank in the network, we computed the individual nestedness contribution (INC), along with two measures of systemic risk: systemic impact (SI) and systemic vulnerability (SV). The INC is computed considering the different roles played by the banks: lender and borrower. We found that borrowing banks with a higher INC would cause more damage to the network if they were hit by a shock — i.e, they have a higher SI. Moreover, lending banks with a higher INC are more vulnerable to shocks on the network.</div></div>","PeriodicalId":100867,"journal":{"name":"Latin American Journal of Central Banking","volume":"6 2","pages":"Article 100136"},"PeriodicalIF":0.0,"publicationDate":"2024-05-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141141506","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-05-18DOI: 10.1016/j.latcb.2024.100133
Juan Angel Garcia , Ricardo Gimeno
The return of high inflation in Latin America (and worldwide) since 2021 has renewed concerns about the persistence of above-target inflation and a potential de-anchoring of inflation expectations. This paper shows that trend inflation estimation using forward-looking information can offer important insights for the understanding of inflation dynamics and long-term inflation expectations. Our analysis for 5 large LATAM economies (Brazil, Chile, Colombia, Mexico and Peru) reveals that a large part of the high inflation observed over 2021–23 mainly reflects transitory influences, and the stability of long-term survey expectations is broadly in line with persistent inflation trends. The risk of a de-anchoring of expectations in those countries therefore seems to be limited. Our findings provide useful information for both monetary policy and market participants in LATAM countries, as well as for central banks and investors worldwide.
{"title":"Navigating high inflation: A joint analysis of inflation dynamics and long-term inflation expectations in Latin America","authors":"Juan Angel Garcia , Ricardo Gimeno","doi":"10.1016/j.latcb.2024.100133","DOIUrl":"https://doi.org/10.1016/j.latcb.2024.100133","url":null,"abstract":"<div><p>The return of high inflation in Latin America (and worldwide) since 2021 has renewed concerns about the persistence of above-target inflation and a potential de-anchoring of inflation expectations. This paper shows that trend inflation estimation using forward-looking information can offer important insights for the understanding of inflation dynamics and long-term inflation expectations. Our analysis for 5 large LATAM economies (Brazil, Chile, Colombia, Mexico and Peru) reveals that a large part of the high inflation observed over 2021–23 mainly reflects transitory influences, and the stability of long-term survey expectations is broadly in line with persistent inflation trends. The risk of a de-anchoring of expectations in those countries therefore seems to be limited. Our findings provide useful information for both monetary policy and market participants in LATAM countries, as well as for central banks and investors worldwide.</p></div>","PeriodicalId":100867,"journal":{"name":"Latin American Journal of Central Banking","volume":"5 4","pages":"Article 100133"},"PeriodicalIF":0.0,"publicationDate":"2024-05-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S2666143824000152/pdfft?md5=9294302768fd25ffa3fc909268dcdb60&pid=1-s2.0-S2666143824000152-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141067958","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-05-12DOI: 10.1016/j.latcb.2024.100132
Marine Charlotte André , Sebastián Medina Espidio
We study for a benchmark small open emerging economy an optimal robust monetary policy à la Hansen and Sargent (2003) considering additive model uncertainty. The robust control approach supposes that economic agents are not able to assign probabilities to a set of all plausible models and rather focuses on the worst possible misspecification from a benchmark model. Our findings are threefold. First, conducting a global robust optimal monetary policy can be limited since the departure from the benchmark model leads to multiple equilibria. Second, when model uncertainty arises only from the IS curve or the UIP condition, the space of unique solutions is expanded. In fact, when the central bank has a preference for robustness on the IS curve only, it should be more aggressive to demand and real exchange rate shocks but more conservative to cost-push shocks. On the other hand, when it has a preference for robustness only for the UIP, the central bank should be more aggressive to demand and cost-push shocks. Third, a sensitivity analysis suggests that conducting a global robust optimal monetary policy with the same misspecification in all equations is limited due to the persistence of inflation, the low exchange-rate pass-through and the need to anchor inflation expectations. Finally, we propose a Bayesian estimation for the Sidaoui and Ramos-Francia’s model over the period 2001–2019.
我们研究了一个基准小型开放新兴经济体的最优稳健货币政策，类似于 Hansen 和 Sargent（2003 年）考虑模型不确定性的加法。稳健控制方法假定经济行为主体无法为一组所有可信的模型分配概率，而是将重点放在基准模型可能出现的最糟糕的错误配置上。我们的研究结果有三个方面。首先，由于偏离基准模型会导致多重均衡，因此实施全球稳健最优货币政策可能会受到限制。其次，当模型的不确定性仅来自 IS 曲线或 UIP 条件时，唯一解的空间就会扩大。事实上，当中央银行只偏好 IS 曲线的稳健性时，它应该对需求和实际汇率冲击更加激进，而对成本推动型冲击更加保守。另一方面，当中央银行只偏好 UIP 的稳健性时，中央银行应该对需求和成本推动型冲击更加激进。第三，敏感性分析表明，由于通胀的持续性、汇率的低传递性以及锚定通胀预期的需要，在所有方程中采用相同的错误设置来实施全球稳健最优货币政策是有限的。最后，我们提出了 2001-2019 年期间 Sidaoui 和 Ramos-Francia 模型的贝叶斯估计方法。
{"title":"Optimal robust monetary policy in a small open emerging-market economy","authors":"Marine Charlotte André , Sebastián Medina Espidio","doi":"10.1016/j.latcb.2024.100132","DOIUrl":"https://doi.org/10.1016/j.latcb.2024.100132","url":null,"abstract":"<div><p>We study for a benchmark small open emerging economy an optimal robust monetary policy à la Hansen and Sargent (2003) considering additive model uncertainty. The robust control approach supposes that economic agents are not able to assign probabilities to a set of all plausible models and rather focuses on the worst possible misspecification from a benchmark model. Our findings are threefold. First, conducting a global robust optimal monetary policy can be limited since the departure from the benchmark model leads to multiple equilibria. Second, when model uncertainty arises only from the IS curve or the UIP condition, the space of unique solutions is expanded. In fact, when the central bank has a preference for robustness on the IS curve only, it should be more aggressive to demand and real exchange rate shocks but more conservative to cost-push shocks. On the other hand, when it has a preference for robustness only for the UIP, the central bank should be more aggressive to demand and cost-push shocks. Third, a sensitivity analysis suggests that conducting a global robust optimal monetary policy with the same misspecification in all equations is limited due to the persistence of inflation, the low exchange-rate pass-through and the need to anchor inflation expectations. Finally, we propose a Bayesian estimation for the Sidaoui and Ramos-Francia’s model over the period 2001–2019.</p></div>","PeriodicalId":100867,"journal":{"name":"Latin American Journal of Central Banking","volume":"5 4","pages":"Article 100132"},"PeriodicalIF":0.0,"publicationDate":"2024-05-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S2666143824000140/pdfft?md5=65ba73022bf455dbf45efdfaa84d39d7&pid=1-s2.0-S2666143824000140-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140914145","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-05-06DOI: 10.1016/j.latcb.2024.100134
Guilherme Spilimbergo Costa , Diogo Abry Guillen
This paper compiles a novel and unique dataset encompassing 439 individuals who served as board members on 16 different inflation-targeting central banks’ monetary policy committees (MPCs) from 1999 to 2018. We document relevant trends over the past twenty years: (i) An increasing share of women serving on committees, albeit still a minority; (ii) an increase in the share of members with previous private sector experience and (iii) an increase in the average age and experience among members over time. Moreover, we find that: (i) A higher proportion of members with MBAs and Masters’ in economics is related to lower levels of inflation; (ii) a committee with more members with formations not in economics or law tends to be more lenient towards the monetary policy target; (iii) the average MPC age within a range of 55 and 60 years seems to be linked to less volatile inflation; and (iv) more MPC women members correlates with both lower and less volatile inflation.
{"title":"An empirical analysis of monetary policy committees composition and its relationship with monetary policy","authors":"Guilherme Spilimbergo Costa , Diogo Abry Guillen","doi":"10.1016/j.latcb.2024.100134","DOIUrl":"https://doi.org/10.1016/j.latcb.2024.100134","url":null,"abstract":"<div><p>This paper compiles a novel and unique dataset encompassing 439 individuals who served as board members on 16 different inflation-targeting central banks’ monetary policy committees (MPCs) from 1999 to 2018. We document relevant trends over the past twenty years: (i) An increasing share of women serving on committees, albeit still a minority; (ii) an increase in the share of members with previous private sector experience and (iii) an increase in the average age and experience among members over time. Moreover, we find that: (i) A higher proportion of members with MBAs and Masters’ in economics is related to lower levels of inflation; (ii) a committee with more members with formations not in economics or law tends to be more lenient towards the monetary policy target; (iii) the average MPC age within a range of 55 and 60 years seems to be linked to less volatile inflation; and (iv) more MPC women members correlates with both lower and less volatile inflation.</p></div>","PeriodicalId":100867,"journal":{"name":"Latin American Journal of Central Banking","volume":"5 4","pages":"Article 100134"},"PeriodicalIF":0.0,"publicationDate":"2024-05-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S2666143824000164/pdfft?md5=d64fcc5a8c5d3a92c879f49f0a312712&pid=1-s2.0-S2666143824000164-main.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140843721","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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