ALL BLOG POSTS
It is no secret that I for years have been very critical about the ECB’s conduct of monetary policy. In fact I strongly believe that the mess we in Europe still are in mostly is due to monetary policy failure (even though I certainly do not deny Europe's massive structural problems).
I have got a lot of questions about what I think about the Swiss central bank’s (SNB) decision last week to give up its ‘floor’ on EUR/CHF - effectively revaluing the franc by 20% - and I must admit it has been harder to answer than people would think. Not because I in anyway think it was a good decision – I as basically everybody else thinks it was a terrible decision – but because I so far has been unable to understand how what I used to think of as one of the most competent central banks in the world is able to make such an obviously terrible decision.
2014 wasn't exactly a great year for the Russian rouble. However, there is a 'currency', which performed worse than the rouble in 2014...Bitcoin
Great news - it has just been published that Scott Sumner will join the Mercatus Center at George Mason University and become Ralph G. Hawtrey Chair in Monetary Policy.
Bloomberg has a great story on differences in the pay of different central bank governors within the euro area.
The talk of Greece leaving the euro area - Grexit - is back. Will Grexit actually happen? I don't know, but I do know that more and more people worry that it will in fact happen.
Nearly a year ago - January 2 - I wrote a blog post on what I termed the Weidmann rule. In the blog post I argued that the ECB is basically following a rule - named after Bundesbank boss Jens Weidmann - which is asymmetrical. The ECB will tighten monetary conditions in the event of a positive aggregate demand (velocity) shock, but will not ease in the event of a negative demand (velocity) shock to the euro zone economy.
Over the past six years the “hawks” among UK and US central bankers have been proven wrong. They have continued to argue that a spike in inflation was just around the corner because monetary policy was “high accommodative”. Obviously Market Monetarists have continued to argue that monetary policy has not been easy, but rather to tight in the US and the UK – at least until 2012-13.
Everybody has been following events in the Russian markets this week, but fewer have kept an eye on Russia's smaller neighbour Belarus, but the small country is seeing some serious contagion from Russia.