Maintaining Low Inflation: Money, Interest Rates, and Policy Stance

This paper examines the usefulness of considering monetary aggregates when assessing monetary policy stance, and contrasts monetary analysis to the current mainstream monetary policy analysis. Monetary developments, unlike interest rate stance measures, are shown to provide quantitative information on subsequent price levels. Moreover, ignoring money and focusing on interest rates and real activity measures neglects crucial information as short-term velocity movements are fully part of the monetary policy transmission process. The analysis also sheds light on the recent change in inflation volatility and persistence as well as on the Phillips curve flattening. The empirical analysis is based on US data since the 1960s as well as euro area and Swiss data since the 1970s.Monetary policy, Monetary aggregates, Inflation, Output, Taylor rule, Equilibrium interest rate

What Drives the Swiss Franc?

This paper analyzes the behavior of the Swiss franc (CHF) over the past 35 years. It relates the evolution of the CHF exchange rates to economic fundamentals like the relative competitiveness of the Swiss export sector, accumulated current accounts, interest rate differentials and oil prices. Some factors like the introduction of the euro, a relative increase in Swiss domestic productivity and higher oil prices seem to have modified the CHF behavior in the last decade, but more data will be needed to draw definitive conclusions. The paper relies on different data sources and assesses potential exchange rate determinants under different angles. Overall, measurement and econometric issues would make it difficult to determine a unique econometric specification or specific values for equilibrium exchange rates.Swiss franc, exchange rates, fundamentals

Optimal Cyclical Monetary Policy: Does Steady-State Inflation Matter?

In general equilibrium models, optimal cyclical monetary policy is usually derived around an optimal steady-state inflation level, which in most cases is zero or equal to the negative of the real interest rate. This paper examines whether and how different steady-state inflation levels and other steady-state distortions affect the optimal monetary policy response to shocks. This issue is first discussed in general terms. Then, a simple example is presented, where optimal policy can be procyclical or countercyclical depending on the steady-state inflation level. This paper suggests that both issues of the choice of inflation target and optimal cyclical monetary policy should be addressed simultaneously, as steady-state distortions influence the optimal reaction of monetary policy to shocks. More generally, the paper shows that assumptions about steady-state distortions affect the derived optimal cyclical policy.

Modeling Monetary Policy

We develop a macroeconomic framework where money is supplied against only few eligible securities in open market operations. The relationship between the policy rate, expected inflation and consumption growth is affected by money market conditions, i.e. the varying liquidity value of eligible assets and the associated risk. This induces a liquidity premium, which explains the observed systematic wedge between the policy rate and consumption Euler interest rate that standard models equate. It further implies a dampened response of consumption to policy rate shocks that is humpshaped when we account for realistic central bank transfers and the dynamics of bond holdings.Monetary Policy, Open market operations, Liquiditypremium, Money market rate, Consumption Eulerrate, Monetary policy transmission

Money and the Great Disinflation

Using U.S. and euro area data, this paper presents a significant and proportional relationship between money growth and subsequent inflation when accounting for equilibrium velocity movements due to inflation regimes changes. These movements, driven by money demand adjustments to low-frequency Fisherian interest rate variations, are derived from consistent U.S. and euro area money demand specifications - after contradictory coexisting results are explained. Not accounting for equilibrium velocity and interest rate movements biases cross-country and time series dynamic money growth / inflation estimated relationships, and leads to the non-proportional, non-significant, and reverse causality results found in studies that include the post-1980 period.money growth, inflation, equilibrium velocity, quantity theory, money demand

Monetary policy, interest rates, and liquidity premia

We augment a standard macroeconomic model by accounting for the fact that central banks supply money only in exchange for eligible assets. Monetary policy implementation then matters for the pass-through of policy rate changes and rationalizes liquidity premia on treasuries. The model explains the observed negative relation between corporate bond yield spreads and the amount of available treasuries. Liquidity premia on eligible assets further provide a structural explanation for the systematic wedge between the policy rate and the consumption Euler rate that standard models equate. Nonetheless, monetary policy effects on real activity and inflation are consistent with broad empirical evidence

COVID-19 emergency response assessment study: a prospective longitudinal survey of frontline doctors in the UK and Ireland: study protocol

INTRODUCTION: The COVID-19 pandemic is putting an unprecedented strain on healthcare systems globally. The psychological impact on frontline doctors of dealing with the COVID-19 pandemic is currently unknown. This longitudinal professional survey aims to understand the evolving and cumulative effects of working during the COVID-19 outbreak on the psychological well-being of doctors working in emergency departments (ED), intensive care units (ICU) and anaesthetics during the pandemic. METHODS AND ANALYSIS: This study is a longitudinal questionnaire-based study with three predefined time points spanning the acceleration, peak and deceleration phases of the COVID-19 pandemic.The primary outcomes are psychological distress and post-trauma stress as measured by the General Health Questionnaire-12 (GHQ-12) and Impact of Events Scale-Revised (IES-R). Data related to personal and professional characteristics will also be collected. Questionnaires will be administered prospectively to all doctors working in ED, ICU and anaesthetics in the UK and Ireland via existing research networks during the sampling period. Data from the questionnaires will be analysed to assess the prevalence and degree of psychological distress and trauma, and the nature of the relationship between personal and professional characteristics and the primary outcomes. Data will be described, analysed and disseminated at each time point; however, the primary endpoint will be psychological distress and trauma at the final time point. ETHICS AND DISSEMINATION: Ethical approval was obtained from the University of Bath, UK (ref: 4421), and Children's Health Ireland at Crumlin, Ethics Committee. Regulatory approval from the Health Regulation Authority (UK), Health and Care Research Wales (IRAS: 281944).This study is limited by the fact that it focuses on doctors only and is survey based without further qualitative interviews of participants. It is expected this study will provide clear evidence of the psychological impact of COVID-19 on doctors and will allow present and future planning to mitigate against any psychological impact. TRIAL REGISTRATION NUMBER: ISRCTN10666798

The COVID-19 emergency response assessment study: a prospective longitudinal survey of frontline doctors in the UK and Ireland

OBJECTIVES: The psychological impact of the COVID-19 pandemic on doctors is a significant concern. Due to the emergence of multiple pandemic waves, longitudinal data on the impact of COVID-19 are vital to ensure an adequate psychological care response. The primary aim was to assess the prevalence and degree of psychological distress and trauma in frontline doctors during the acceleration, peak and deceleration of the COVID-19 first wave. Personal and professional factors associated with psychological distress are also reported. DESIGN: A prospective online three-part longitudinal survey. SETTING: Acute hospitals in the UK and Ireland. PARTICIPANTS: Frontline doctors working in emergency medicine, anaesthetics and intensive care medicine during the first wave of the COVID-19 pandemic in March 2020. PRIMARY OUTCOME MEASURES: Psychological distress and trauma measured using the General Health Questionnaire-12 and the Impact of Events-Revised. RESULTS: The initial acceleration survey distributed across networks generated a sample of 5440 doctors. Peak and deceleration response rates from the original sample were 71.6% (n=3896) and 56.6% (n=3079), respectively. Prevalence of psychological distress was 44.7% (n=1334) during the acceleration, 36.9% (n=1098) at peak and 31.5% (n=918) at the deceleration phase. The prevalence of trauma was 23.7% (n=647) at peak and 17.7% (n=484) at deceleration. The prevalence of probable post-traumatic stress disorder was 12.6% (n=343) at peak and 10.1% (n=276) at deceleration. Worry of family infection due to clinical work was the factor most strongly associated with both distress (R(2)=0.06) and trauma (R(2)=0.10). CONCLUSION: Findings reflect a pattern of elevated distress at acceleration and peak, with some natural recovery. It is essential that policymakers seek to prevent future adverse effects through (a) provision of vital equipment to mitigate physical and psychological harm, (b) increased awareness and recognition of signs of psychological distress and (c) the development of clear pathways to effective psychological care. TRIAL REGISTRATION NUMBER: ISRCTN10666798

FebriDx point-of-care test in patients with suspected COVID-19: a pooled diagnostic accuracy study

Background: Point-of-care (POC) tests for COVID-19 could relieve pressure on isolation resource, support infection prevention and control, and help commence more timely and appropriate treatment. We aimed to undertake a systematic review and pooled diagnostic test accuracy study of available individual patient data (IPD) to evaluate the diagnostic accuracy of a commercial POC test (FebriDx) in patients with suspected COVID-19.Methods: A literature search was performed on the 1st of October 2020 to identify studies reporting diagnostic accuracy statistics of the FebriDx POC test versus real time reverse transcriptase polymerase chain reaction (RT-PCR) testing for SARS-CoV-2. Studies were screened for risk of bias. IPD were sought from studies meeting the inclusion and exclusion criteria. Logistic regression was performed to investigate the study effect on the outcome of the RT-PCR test result in order to determine whether it was appropriate to pool results. Diagnostic accuracy statistics were calculated with 95% confidence intervals (CIs).Results: 15 studies were screened, and we included two published studies with 527 hospitalised patients. 523 patients had valid FebriDx results for Myxovirus resistance protein A (MxA), an antiviral host response protein. The FebriDx test produced a pooled sensitivity of 0.920 (95% CI: 0.875-0.950) and specificity of 0.862 (0.819-0.896) compared with RT-PCR, where there was an estimated true COVID-19 prevalence of 0.405 (0.364-0.448) and overall FebriDx test yield was 99.2%. Patients were tested at a median of 4 days [interquartile range: 2:9] after symptom onset. No differences were found in a sub-group analysis of time tested since the onset of symptoms.Conclusions: Based on a large sample of patients from two studies during the first wave of the SARS-CoV-2 pandemic, the FebriDx POC test had reasonable diagnostic accuracy in a hospital setting with high COVID-19 prevalence, out of influenza season. More research is required to determine how FebriDx would perform in other healthcare settings with higher or lower COVID-19 prevalence, different patient populations, or when other respiratory infections are in circulation