UK QE reconsidered: the real economy effects of monetary policy in the UK, 1990-2012 – an empirical analysis

Empirical studies of so called ‘unconventional’ monetary policy – ‘Quantitative Easing’ or ‘Large Scale Asset Purchases’ - since the North Atlantic Financial Crisis of 2007-2009 in the United Kingdom and elsewhere have mainly focussed on the effect of policy on intermediate variables rather than the stated ultimate goal of such policies, boosting nominal demand and GDP growth. Secondly and relatedly they tend to focus on the crisis and post-crisis period, a time of extraordinary economic and financial dislocation, which creates counterfactual and attribution problems and fails to capture typical macroeconomic lag dynamics. Adopting the approach of Voutsinas and Werner (2010), and building on Lyonnet and Werner’s (2012) study of UK QE, this paper addresses these weaknesses by 1) examining the impact of various different monetary policy instruments (including Quantitative Easing) directly on UK nominal GDP growth; and 2) using a quarterly time series beginning in the first quarter of 1990 and up to the last quarter of 2012 (92 observations in total). We use the Hendry ‘general-to-specific’ econometric methodology to estimate a parsimonious model. The results show that disaggregated bank credit to the real economy (households and firms) has the most significant impact on nominal GDP growth. Changes to the central bank’s interest rate, central bank reserves, and total central bank asset ratios drop out of the model as insignificant. The policy implication it that, as private banks continue to shrink their balance sheets in the UK and Europe following the North Atlantic Crisis of 2008, central banks might wish to consider ‘unconventional’ monetary policies that more directly boost credit to the real economy and thus nominal GDP growt

Private Landed Property and Finance: A Checkered History

This article examines the links between private property in land and the financial system. Private landed property (PLP) has played an important role in supporting the growth of modern banking and credit systems, industrialization, and economic democratization. However, since the 1980s, high-income economies have exhibited a strong preference for PLP as a form of tenure, in the form of home ownership in particular. This pattern has combined with financial liberalization and innovation to create a land-finance feedback cycle with negative social and economic outcomes. They include a housing affordability crisis for younger and poorer socioeconomic groups; rising wealth inequality as land rents have become more concentrated; economic stagnation due to capital misallocation; and increased financial fragility as household debt has exploded. We illustrate these historical processes in the Anglo-Saxon “home-owning democracies,” where they have been strongest, focusing in particular on the United Kingdom, Australia, and the United States. This article considers how alternative tenure arrangements and reforms to finance and taxation could help mediate these dynamics

An Unobserved Components Approach to Separating Land from Structure in Property Prices: A Case Study for the City of Brisbane

The study develops a spatio-temporal model of hedonic pricing that explicitly separates the land and the structure components of property prices. This is illustrated with a dataset for Brisbane, Australia, constructed by combining commercial real estate, local government databases and GIS-based spatial analyzes. The land component of prices has increased from 42% in 2000 to 66% in 2010. This has implications for a broad range of planning and policy issues, including property tax rates, town planning, and options for climate adaptations.

Keeping wealth local

How we can use Urban Wealth Funds to unlock spending and drive local economic development and housing affordability

USING BIOLOGY TO BETTER INFORM MARESTAIL [\u3cem\u3eConyza canadensis\u3c/em\u3e (L.) Cronq.] MANAGEMENT

The importance of sustainable weed management practices continues to grow as farmers are increasingly faced with herbicide resistant weed populations. Marestail (Conyza canadensis), also known as horseweed, is a problematic weed in soybean cropping systems that has developed resistance to multiple herbicide modes of action. A two year study was conducted in Lexington, KY, examining timing patterns of marestail emergence and different integrated weed management strategies for marestail prior to no-till soybean. Treatments contained fall and spring applied herbicides with different levels of residual activities, cover crops and combinations of the two. Additionally, yields and partial budget net returns of each management strategy were compared to a resistance weed management treatment and a common weed management program that many soybean farmers are employing. Excluding the control population in year one, in both site years, marestail emergence was significantly higher during the fall in all populations. Treatments containing a cover crop suppressed marestail emergence equivalently to treatments using herbicides in both years. There were no significant differences in yields when a cover crop was present in either year. Partial budget net returns varied in treatments using cover crops and synthetic herbicides. A treatment using a cover crop had the highest net returns in both years

Is Monetary Financing Inflationary? A Case Study of the Canadian Economy, 1935-75

Historically high levels of private and public debt coupled with already very low short-term interest rates appear to limit the options for stimulative monetary policy in many advanced economies today. One option that has not yet been considered is monetary financing by central banks to boost demand and/or relieve debt burdens. We find little empirical evidence to support the standard objection to such policies: that they will lead to uncontrollable inflation. Theoretical models of inflationary monetary financing rest upon inaccurate conceptions of the modern endogenous money creation process. This paper presents a counter-example in the activities of the Bank of Canada during the period 1935-75, when, working with the government, it engaged in significant direct or indirect monetary financing to support fiscal expansion, economic growth, and industrialization. An institutional case study of the period, complemented by a general-to-specific econometric analysis, finds no support for a relationship between monetary financing and inflation. The findings lend support to recent calls for explicit monetary financing to boost highly indebted economies and a more general rethink of the dominant New Macroeconomic Consensus policy framework that prohibits monetary financing

I Can\u27t Believe I Lived Through This

https://fisherpub.sjfc.edu/covid-journal-prose/1015/thumbnail.jp

Breaking the taboo: a history of monetary financing in Canada, 1930-1975.

Monetary financing - the funding of state expenditure via the creation of new money rather than through taxation or borrowing - has become a taboo policy instrument in advanced economies. It is generally associated with dangerously high inflation and/or war. Relatedly, a key institutional feature of modern independent central banks is that they are not obligated to support government expenditure via money creation. Since the financial crisis of 2007-2008, however, unorthodox monetary policies, in particular quantitative easing, coupled with stagnant growth and high levels of public and private debt have led to questions over the monetary financing taboo. Debates on the topic have so far been mainly theoretical with little attention to the social and political dynamics of historical instances of monetary financing. This paper analyses one of the most significant twentieth-century cases: Canada from the period after the Great Depression up until the monetarist revolution of the 1970s. The period was a successful one for the Canadian economy, with high growth and employment and manageable inflation. It offers some interesting insights into the relationship between states and central banks and present-day discussions around the governance of money creation