Central banks

Entropic tilting of forecasts to SPF histograms: analytics & applications

09/17/2026 European Central Bank Central banks

We develop a direct approach to incorporating survey density forecasts into model-based predictive distributions. Histogram forecasts from the U.S. Survey of Professional Forecasters (SPF) carry rich nonparametric information about expected outcomes, but existing methods rely on moment-based approximations that discard part of it. We instead tilt entropically to the histogram probabilities themselves, matching them exactly.

Measuring sentiment news with transformer-based language models

09/17/2026 European Central Bank Central banks

Measuring sentiment from financial news is a central task in economics and finance, yet most existing indicators rely on dictionary-based approaches that infer sentiment from word counts and only partially capture context, negation, and semantic structure. This paper proposes a framework for constructing daily news mood indices using transformer-based language models and evaluates whether they better represent sentiment than dictionary-based alternatives.

When firms do not take the money and run: evidence from corporate loan moratoria

09/16/2026 European Central Bank Central banks

Suspending loan repayments is a widely used policy tool to provide liquidity during crises. We study the take-up and real effects of the 2020 Austrian corporate debt moratoria, which required banks to temporarily postpone loan repayments for eligible firms. Exploiting a discontinuity in eligibility at a two-million-euro asset threshold, we document a take-up rate of 44%, well below full participation, reflecting both the pecuniary cost of the policy and firms’ fear of stigmatization.

Endogenous monetary policy effectiveness

09/15/2026 European Central Bank Central banks

How does the effectiveness of monetary policy vary over the policy cycle? Do tightenings and loosenings have symmetric effects on the macroeconomy? This paper addresses these questions using a nonlinear empirical framework that allows financial exposure to evolve endogenously in response to macroeconomic conditions and monetary policy changes. We provide new evidence on how monetary policy effectiveness varies over the policy cycle and across economic states.

DeFi-ying the Fed? Monetary policy transmission to stablecoin deposit rates

09/14/2026 European Central Bank Central banks

Does the Federal Reserve’s monetary policy influence the rates on USD-pegged stablecoins? While major stablecoin issuers do not pay interest, investors can earn returns by depositing stablecoins in Decentralized Finance (DeFi) protocols. We document unusually large and persistent spreads between traditional short-term interest rates and DeFi deposit rates, as well as a weak and unstable transmission of policy rate changes.

Fiscal policy and sectoral spillovers in open-economy HANK

09/14/2026 European Central Bank Central banks

Government spending falls disproportionately on non-tradable services. We show empirically that government spending shocks stimulate private consumption along with sizable spillovers to the goods sector and a relative decline in goods prices. We rationalize these findings with a two-sector open-economy HANK model. Uninsurable income risk and precautionary savings lead to a persistent income-driven expansion in private consumption. In the tradable sector, import intensity and limited labor reallocation dampen wage pass-through to prices, matching observed co-movements.

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