Eoin Treacy's view

DB: Eurozone bond yields in case of ECB QE 

In summary, government QE appears to be priced in 5Y5Y Eonia real rates. However it could have a modest impact on 5Y Eonia rates, 5Y5Y breakevens and core and semi-core spreads to Eonia while it should have a bigger impact on peripheral spreads to Eonia (especially longer dated). Relative to this base case expectation of market reaction, the impact on the German curve could be stronger due to supply/demand imbalances in case of government bond QE done along capital keys. This could also spill to Eonia real rates more than we are currently assuming. EUR5Y5Y breakevens have room to normalize more in principle, but this is contingent on the underlying inflation dynamics rather than the ECB QE announcement. The current weak inflation dynamics would be consistent with a muted impact (if any) for now. If 5Y5Y breakevens were to normalize more than we expect, it is likely that peripheral spreads would tighten more than we have assumed. The tightening in peripheral spreads should offset any increase in risk-free rates due to the move in inflation breakevens.

IMF: “Impact of Demographic Changes on Inflation and the Macroeconomy”

This paper illustrates how demographic variables move over time and analyzes how they influence macroeconomic variables such as economic growth, inflation, savings and investment, and fiscal balances, from an empirical perspective.

Fed: “Projecting GDP Growth Using Trends in Labor Force Participation”

Fed: “The Implications of a Graying Japan for Government Policy”

We find that Japan faces a severe fiscal crisis if remedial action is not undertaken soon, and we analyze alternative strategies for correcting Japan's fiscal imbalances. 

IMF: “Borrower Protection and the Supply of Credit: Evidence from Foreclosure Laws”

We find that judicial requirements reduce the supply of credit only for jumbo loans that are ineligible for GSE guarantees.

 IMF: “Identifying Speculative Bubbles”

Based on a comparison to past boom-bust episodes, the approach is signaling mounting vulnerabilities in risky U.S. credit markets. Policy makers and regulators should be attune to any further deterioration in issuance quality, and where possible, take steps to ensure the post-crisis financial infrastructure is braced to accommodate a re-pricing in credit risk.

“Does U.S. Monetary Policy Affect Crude Oil Future Price Volatility?”

Strong evidence of an inverse relation between the Effective Federal Fund Rate and crude oil future price volatility is found.

IMF: “Slowdown in Emerging Markets: Sign of a Bumpy Road Ahead?”

For the BRICS we find that primarily structural factors are behind the slowdown in China, Russia and South Africa, while in Brazil and India, the slowdown appears to be to a large extent cyclical.

White House: “ELEVEN FACTS ABOUT AMERICAN FAMILIES AND WORK”

Larry Summers: “Asiaphoria Meets Regression to the Mean”

our analysis suggests that forecasters and planners looking at China would do well to contemplate a much wider range of outcomes than are typically considered.

“The Research Productivity of New PhDs in Economics: The Surprisingly High Non-Success of the Successful”

Our evidence shows that only the top 10–20 percent of a typical graduating class of economics PhD students are likely to accumulate a research record that might lead to tenure at a medium-level research university. Perhaps the most striking finding from our data is that graduating from a top department is neither necessary nor sufficient for becoming a successful research economist. Top researchers come from across the ranks of PhD-granting institutions, and lower-ranked departments produce stars with some regularity, although with lower frequency than the higher-ranked departments. Most of the graduates of even the very highest-ranked departments produce little, if any, published research. Indeed, we find that PhD graduates of equal percentile rank from certain lower-ranked departments have stronger publication records than their counterparts at higher-ranked departments.

RBA: “The Effect of the Mining Boom on the Australian Economy”

We estimate that the mining boom boosted real per capita household disposable income by 13 per cent by 2013. The boom has contributed to a large appreciation of the Australian dollar that has weighed on other industries exposed to trade, such as manufacturing and agriculture.