The Unassuming Economist

From a paper by Martin T. Bohl, Niklas Humann, and Pierre L. Siklos:

“This survey synthesizes evidence on the bidirectional links between commodity markets and monetary policy. On the commodities-to-policy side, we review how shocks to energy, food, and metals pass through to inflation, inflation expectations, economic activity, and financial stability in state-dependent ways that vary by shock type, exposure, and policy regime. We complement the literature with an analysis of central-bank speeches, showing how officials classify commodity shocks and how these framings map into policy stances. On the policy-to-commodities side, we organize evidence on the transmission of monetary policy to commodity markets via financial, real-economy, and expectations channels, highlighting heterogeneity across policy instruments, commodities, and central banks. We emphasize how financialization tightens cross-asset linkages, raises leverage and margin sensitivity, and amplifies discount-rate and risk-taking mechanisms. Overall, commodities are best treated as policy sensitive state variables, not exogenous disturbances, with implications for policy design, central bank communication, and international monetary spillovers.”

From a paper by Tim Köhler:

“This study presents an examination of the predictive power of narrative reports from German economic institutes beyond traditional quantitative forecasts in anticipating economic recessions and directional changes in the business cycle. I transform qualitative narratives into quantitative sentiment scores using four different dictionaries and methods and use fixed-effect logistic regression to analyse their impact. To evaluate model performance, I use the Area under the Receiver Operating Characteristic Curve (AUROC) to compare models with versus without sentiment scores. Additionally, I employ DeLong’s test and bootstrapping to test the significance of AUROC improvements. Furthermore, I explore the potential of combining multiple sentiment scores to enhance forecasting accuracy. The results show that sentiment scores significantly enhance forecasting accuracy. This suggests that narrative information provides valuable insights beyond quantitative forecasts alone.”

From a paper by Victor Shevchu:

“The aim of the article is to present results of the study on the link between business cycle and house prices in 16 regional capital cities in Poland. Using quarterly data for the period 20102024, the study finds that regional business cycle effects on cyclical fluctuations in regional house prices are predominantly positive. Following an increase in the National Bank of Poland (NBP) reference rate, house prices are on a decline in 11 out of 16 regional capital cities. The effects of housing quality and the exchange rate on house prices are ambiguous.”

From a paper by Sune Karlsson and Pär Österholm:

“In this paper, we analyse whether two key macroeconomic relationships in Australia – Okun’s law
and the Phillips curve – have been stable over time. This is done by estimating hybrid time-varying
parameter Bayesian VAR models using quarterly data from 1978 to 2024. Model comparison based
on marginal likelihoods indicates that Okun’s law has been stable, whereas the Phillips curve has
not. Using the preferred specification of the BVAR for the unemployment rate and inflation, we
also calculate trend values for both variables. The model’s trend unemployment rate at the end of
the sample is approximately five percent; estimated trend inflation at the same point in time is close
to the Reserve Bank of Australia’s inflation target.”

From a paper by Barbara Livorová and Adam Geršl:

“This paper contributes to studying the impacts of monetary policy on labour income inequality in the euro area using subnational regional data on compensation per employee. The dataset covers 932 NUTS3 regions from 16 countries over the period 2000 – 2022 at a yearly frequency. Using sub-sample analysis combined with local projections, the results show that monetary policy rate changes have heterogeneous effects on the growth of real compensation per employee (deflated by the GDP deflator) at both the bottom and upper ends of the regional distribution within individual countries. From the whole euro area perspective, monetary policy tightening has a heterogeneous effect on labour incomes between regions – in times of monetary policy easing, shortening the gap between average low- and high-income regions.”