Webinar Announcement: March 19, 12:00-13:00 Central European Time
How to build a Ukrainian Development Bank
by Inna Melnykovska (Central European University), Eric Monnet (Paris School of Economics), and Matthias Thiemann (Sciences Po Paris)
The future of Ukraine remains highly uncertain. In the long term, a strong economic recovery will be crucial for ensuring stability and peace. Recently, Inna Melnykovska, Eric Monnet, and Matthias Thiemann proposed establishing a Ukrainian development bank. According to these economists, such an institution could integrate existing financial structures, channel EU aid, support small and medium-sized enterprises, and drive economic modernization. In this webinar, they will discuss their ideas for building a Ukrainian Development Bank.
- Time: March 19, 2025, 12:00 – 13:00 Central European Time
- Online
- Presentation and discussion in English. Click HERE to register.
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Tariffs, tariffs, tariffs. Are you confused what actually happens? Then we recommend Trump’s trade war timeline 2.0: An up-to-date guide by Chad Bown from the Peterson Institute for International Economics
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US consumer sentiment fell again in March according to the Index of Consumer Sentiment by the University of Michigan (from 64.7 to 57.9). Declines are „seen consistently across all groups by age, education, income, wealth, political affiliations, and geographic regions.“
In particular, unemployment and inflation expectations increased. Overall, the US economy seems to weaken.
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On March 18-19, the Fed will hold its monetary policy meeting. Most participants in our survey expect the Fed to keep interest rates unchanged.
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On March 20, the Swiss National Bank (SNB) will hold its monetary policy meeting. A slight majority of the participants in our survey expect the SNB to cut interest rates by 25 bps.
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Here is what our network liked (selection): Monetary policy and geopolitics, the banking crisis of 2023, and much more…
Super interesting!“Geopolitics meets monetary policy: decoding their impact on cross-border bank lending“ by Swapan-Kumar Pradhan, Viktors Stebunovs, Előd Takáts and Judit Temesvary“We find economically and statistically significant effects. Geopolitical tensions between countries reduce cross-border bank lending between them. Furthermore, there is an interaction between geopolitical tensions and monetary policy: elevated geopolitical tensions amplify the international transmission of monetary policies. Finally, the effects are particularly strong when geopolitical tensions coincide with monetary policy tightening.“
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Highly recommended!“Distributed ledgers and the governance of money,“ by Raphael Auer, Cyril Monnet, and Hyun Song Shin“Distributed ledgers promise to enable the classical vision of money as a universal transaction record. But is it ever optimal to update a ledger through decentralized consensus?“
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Thought-provoking!“Rushing to Judgment and the Banking Crisis of 2023“ by Steven Kelly and Jonathan Rose.“This article critically reviews the 2023 banking crisis with the benefit of two years of hindsight. We highlight seven facts that depart from the standard account of the crisis that has developed. We describe the crisis as a reaction to bank business models that focused on providing banking services to certain economic sectors, crypto-asset firms and venture capital, that had come under economic pressure during the preceding year.“
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Highly recommended! “The Incoherent Case for Tariffs: Trump’s Fixation on Economic Coercion Will Subvert His Economic Goals” by Chad P. Bown and Douglas A. Irwin “Trump is correct in his assertion that tariffs raise government revenue. But they do so inefficiently compared with other taxes. Unlike tariffs, alternative forms of taxation collect large amounts of revenue and impose few economic distortions—particularly forms of taxation that apply low tax rates to a large tax base.»
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Thought-provoking!“A Model of Global Currency Pricing“ by Michael B. Devereux, Rui Lu, Kang Shi, and Juanyi (Jenny) Xu“This paper proposes a concept of a global currency and introduces a “global currency pricing” specification into a standard N-country open economy macroeconomic model. A global currency is defined as a virtual unit of account that is exclusively used for international trade invoicing and is formed as a basket of individual currencies, similar to the existing SDR.““We derive the conditions under which global currency pricing (GCP) dominates all other outcomes, and is an optimal choice of invoicing currency for individual firms.“
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So much food for thought in the BIS Quarterly Review!For instance, the article „The global drivers of private credit„, by Fernando Avalos, Sebastian Doerr, and Gabor Pinter.“Cross-country evidence shows that the footprint of private credit is larger in countries with lower policy rates, more stringent banking regulation and a less efficient banking sector.“
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Super interesting!“Monetary Policy and the Distribution of Income: Evidence from U.S. Metropolitan Areas“ by Giovanni Favara, Francesca Loria, and Egon Zakrajšek“Exploiting geographic variation in income distribution over time, we study how unanticipated changes in the monetary policy stance shape the subsequent dynamics of income inequality. The results show that monetary policy persistently affects labor income inequality and that these distributional effects are amplified significantly in weak local labor markets.“
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