The Lockdown Weighted inflation CPILW for November 2020

This blog is written by NIESR Fellow Huw Dixon. Any opinions expressed in the paper are those of the author, and do not necessarily reflect the views of the Institute
 
Summary
The CPILW fell slightly from 0.9% in October to 0.7% in November.  The CPIH measure of inflation also decreased from 0.9% in October 2020 to 0.6% in November. Both measures indicate a fall in inflation in November.

Financial market development, monetary policy and financial stability in emerging market economies

BIS Papers No 113, December 2020. Financial markets are an important component in the transmission of monetary policy and play a key role in fostering financial stability. Financial market development (FMD) aims at enhancing the capacity of the financial system to pool domestic savings and foreign capital in funding investment and consumption, and at enabling efficient risk-sharing. Deep and liquid markets promote transparent and efficient pricing of assets, ...

The recession-mortality nexus and Covid-19

Countries with a stronger predicted GDP decline in 2020 have also seen a larger number of deaths in excess of official Covid-19 fatalities. Historical data show that recessions are systematically associated with higher mortality, especially in developing economies. Following a recession, death rates remain elevated for several years. The eventual death toll of Covid-19 may be understated if the impact of the pandemic-induced recession is neglected. Limiting the economic fallout of the pandemic could also reduce excess mortality.

How does competition among high-frequency traders affect market liquidity?

When high-frequency trading firms compete, does stock market liquidity deteriorate? I argue that the answer is yes. High-frequency trading competition may impact stock market liquidity via two channels. First, more competition is accompanied by more high-frequency trading and larger trading volumes, which improve market liquidity. Second, more competition may mean that high-frequency traders adapt their trading strategies and engage in more speculative trades, which harms market liquidity.

The stochastic impact of extreme weather events

Global warming is likely to increase the frequency and intensity of extreme or abnormal weather events (Herring et al, 2018, NASEM, 2016). In this note, we quantify the uncertainty of GDP outcomes resulting from abnormal weather events, considering both the initial destruction that is caused by the event as well as the boost to activity from the subsequent rebuild.
 

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