In a recent BIS paper, the authors find that prices of goods and services across advanced economies do not react to changes in the value of the exchange rate. For some, this is great news as citizens in advanced economies will be able to consume more with their incomes. However, central bankers are wary of this as they expect prices to rise gradually and average 2% in most countries. In fact, the ECB recently changed its mandate to target inflation at 2% despite failing to reach this target since the 2008 Great Financial crisis. …
Oil prices have not only recovered, but the relaxation of lockdown measures have caused prices to rise from $61 per barrel in march to $71 per barrel in August 2021. Much of the current rally was expected and market pricing reflected the impact of deferred demand during the COVID-19 pandemic. The current rally is driven by post-COVID optimism, a resurgence in demand for oil and related products and a gradual reopening of economies amidst higher vaccine rates.
Africa is expected to be hardest hit by the adverse impacts of climate change if significant investments in mitigation and adaptation, as well as other relevant measures, remain insufficient. Its largely informal economies have become increasingly fragile even as governments have borrowed more to reduce the negative impact of the virus on their citizens and economies.
The area of sustainable finance appears to offer some hope in the form of green bonds — a financial instrument that is labeled green because the proceeds raised from the bond issue are used to finance or refinance projects and assets that have…
The ECB now aims for inflation at 2%, rather than its previously elusive target of “close to, but below, 2%.”
A few reasons why you might care?
· You may be on a fixed or variable interest rate mortgage. Changes in the level of interest rates will affect your net worth and your ability to borrow respectively.
· You are an entrepreneur and wonder fi you’ll finally be able to lend from the bank.
· You’re a citizen that travels and wonders why the ECB wants the price of food, flights and cinema tickets to increase.
For over 23…
Since the Bitcoin halving in May 2020, the cryptocurrency market has experienced several exciting bull runs and downturns. During this time, more institutional investors and regular citizens have invested in cryptocurrencies . As cryptocurrencies have grown in popularity, they have come under more regulatory scrutiny. Governmental and regulatory approaches to cryptocurrencies vary greatly around the world. At one extreme, El Salvador has passed legislation making Bitcoin legal cash, while China, which has the biggest concentration of Bitcoin miners, has launched a mining crackdown.
Meanwhile, the European Commission’s proposed Regulation in Crypto Markets (MiCA) is undergoing its initial readings in…
Innovation is at the heart of the UK’s strategy to boost productivity and economic growth. It offers new opportunities to increase the competitiveness of UK firms and create transformative technologies which address societal challenges ranging from climate change to better health outcomes. According to the Office of National Statistics (2020); net expenditure on research and development (R&D)hit a new high of £13.1 billion in 2019. Similarly, the total R&D expenditure on knowledge transfer activities reached £13.4 billion in 2019 and represents 0.6% of gross domestic product (GDP), unchanged since 2010.
Looking ahead, the government is determined to build on…
The price of Bitcoin and other cryptocurrencies have gone through wild swings. Interest from public investors, experts and regulation have surged, but the future regulatory framework for digital assets is complex and uncertain.
Prior to COVID-19, monetary policy was the new game in town. But cryptocurrencies appear be the leading cause of worry amongst regulators across the world. The U.S. is more accommodating about cryptocurrencies, but China has imposed an outright ban, while Europe continues to straddle the regulatory line.
Whenever a new financial asset is created — such as derivatives — regulators impose guard rails to prevent the…
The COVID-19 pandemic imposed an unprecedented shock on the global economy, causing significant outflows of capital from emerging market economies, a sudden drop in domestic demand, and complete or at least partial closure of economic sectors. In addition to the loss of human lives, falling incomes and deep retrenchment in consumption have caused a contraction in GDP growth across advanced, emerging, and developing market economies. …
As the impact of COVID-19 wanes and governments reduce or completely withdraw social distancing measures , a heterogenous recovery appears to be in sight. While the debate on secular stagnation continues to ravage, inflation appears to be exceeding its mandated targets in recent months. The COVID-19 pandemic depressed demand across most advanced and developing market economies and the 90th percentile of most income distributions were affected, causing consumers to postpone purchases of cars, electronic products, and services such as tourism and entertainment.
In the last three months, governments have started vaccinating their citizens and economies have largely reopened, allowing…
The COVID-19 pandemic is an unfortunate health and economic shock that bought the U.S. economy to a grinding halt. However, vaccine rollouts and the gradual reopening of the economy are causing the U.S economy to gradually return to pre-pandemic levels. The U.S. Bureau of Labor Statistics showed that in May 2021, total nonfarm payroll employment rose by 559,000, and the unemployment rate declined by 0.3% to 5.8%. …