By Irmak Dyonmez, Khalil Jama and Paris Stott. Introduction Inflation is like one’s own emotional baggage; let it build up over time and you may find yourself unloading on an unfortunate, unsuspecting individual. Indeed, inflation carries a negative association with a mismanaged economy, a rising cost of living and entrenched economic…

By Ciáran Heelan, Shahan Khan, Sanah Suresh, Peredur Morgan, Timothy Doherty and Annie Wang Following our article “The Future of the Economy”, a year on the Monetary Policy Division outlines their new predictions for the next few years using the information that they have learnt from Part 1 (the role…

By Patrick Savage, Yunjia Hu, Tim Doherty and Alex Campion Information Set 1.1 Labour Market Measures The Fed uses multiple data to track the labour market such as unemployment rate, non-farm payrolls, manufacturing payrolls, labour-force participation rate, Automatic Data Processing (ADP) national employment report, and job opening and labour turning survey. Below…

By Ciarán Heelan, Annie Wang, Peredur Morgan and Michelle Tian Information Set To make monetary policy decisions, the Governing Council aims for price stability and economic growth within the Eurozone, analysing indicators such as the Harmonised Index of Consumer Prices (HCPI) and Real GDP to track their progress. As established in the…

By Mazen Badawy, Andy Koh, Sanah Suresh and Shahan Khan Information Set Before making Monetary Policy (MP) decisions, the MPC members look more broadly at the following aspects: International economy Monetary and financial conditions Demand and output of government services (like healthcare), manufacturing and construction activity, output in business, transport and work-related…

By Dominik Grave (Runner-up in the Monetary Economic Competition) 1. Monetary policy during the Covid-19 pandemic This paper analyses the support measures implemented by the European Central Bank (ECB) to counteract the impact of the Covid-19 pandemic. It is argued that capital and liquidity requirements enable countercyclical lending but are restrained by commercial banks´ perceived uncertainty during…

By Zachary Cameron (Runner-up in the Monetary Economic Competition) The frequency and severity of financial crises in the post-Bretton Woods era have precipitated numerous critiques of the United States-led, neoliberal-based, international economic system. Lesser-developed countries have viewed the 1997 and 2008 financial crises, in particular, as being indictments of laissez-faire…

By Timothy Higgins (Winner of the Monetary Economic Competition) This paper addresses the question of whether central bank digital currencies (CBDCs) could be a tool for combating climate change by reducing carbon emissions from producing and managing physical cash. Several studies have shown that the manufacture, circulation, and destruction of…

By Joe Marshall, Kelly Ding and Sarah Wang Introduction One of the primary functions of a central bank is to conduct expansionary monetary policy. The most obvious way to achieve this goal is to lower the nominal interest rate, which is directly under their control. The rationale for this is clear…