In some cases, we approach the data with a certain relationship in mind. One may think of a human brain acts as a machine learning algorithm searching for patterns. Yet, these patterns may be biased by our own willingness to find certain relationships in the data, which fit our ideas. One of such examples subject … Freedom, equality and … bitcoin? weiterlesen

The European Central Bank (ECB) currently conducts a strategy review within its framework of inflation targeting that aims at consumer prices. In this context, the ECB not only assesses the effectiveness of its policy instruments but also revisits its inflation target that is at the core of monetary policy (Lagarde 2020). The ECBs toolbox to … Consumer Price Inflation Targeting – Instruments and their Effectiveness weiterlesen

The announcement effect of the European Council’s rescue plan had significantly less influence on the decline in government bond spreads than the “Whatever it takes”-speech by Mario Draghi. Still, this fiscal event has often been referred to as the Hamilton moment. The European recovery plan covered common debt of the European member states. Therefore, it … The Hamiltonian Moment still has no Bazooka weiterlesen

https://www.dw.com/en/the-euro-prepares-for-a-digital-makeover/a-55216942

Margin Calls haben die Kursstürze durch den Covid-19 Schock im März massiv verstärkt und beschleunigt. Erst durch Liquiditätsinterventionen durch das FED und den dadurch erreichten Stopp der Welle an Margin Calls kann auch der Vermögenspreisverfall gebremst werden. Zentralbanken und ihre Fähigkeit, schnell und gezielt einzugreifen, scheinen somit essenziell für eine Stabilisierung des Finanzmarktes. Die im … Margin Calls und der (systematische) Katalysatoreffekt für Kursstürze und Unsicherheit weiterlesen

When the central bank of the United States takes monetary policy decisions there are direct economic implications for the Euro Area. The impact of increasing interest rates on industrial production and consumer prices in the Euro Area is small and positive. These contractionary monetary shocks also lead to a Euro appreciation and a deterioration of … How does monetary policy in the United States affect the Euro Area? weiterlesen

The upcoming Digital Euro, highly discussed in the autumn conference 2020 by the Deutsche Bundesbank, is expected to be introduced by the European Central Bank (ECB). How will the Digital Euro affect our everyday life and do we want/need it? Germany loves cash payment like almost no other country. However, this is not compatible with … A new CBDC will be born: Welcome Digital Euro! weiterlesen

The Recovery Plan has been celebrated as the European Hamiltonian moment. Financial markets also responded to the negotiations and the announcement on July 21st. Whether it is a true completion of the monetary and fiscal union, however, remains questionable to the markets. Special European Council meeting concerning the necessary financial support for a recovery of … European Recovery Fund: Hamiltonian moment to financial markets, too? weiterlesen