Daily Archives: October 4, 2012

Professor Michael Woodford of Columbia University is an extremely renowned macro-economist, and rightly so, but only recently has he occupied a central place in market thinking. Since his paper on US monetary policy at Jackson Hole, and the favourable remarks which Ben Bernanke made about him, everyone is trying to understand what his influence on the Fed might eventually mean.

His writing can be complex and intricate, which is in the nature of the subject, but his current policy recommendation is quite clear: the Fed should adopt a target for the level of nominal GDP which would have the effect of increasing price inflation, and inflation expectations in the period ahead, and thus reduce the real rate of interest.

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Claire Jones

Mario Draghi. Image by Getty.

Mario Draghi. Image by Getty.

Hello and welcome to our live blog on the European Central Bank’s press conference, which follows the governing council’s vote earlier today.

Today’s presser is held in Kranj, Slovenia. ECB president Mario Draghi will be flanked by Vitor Constâncio, ECB president, and Marko Kranjec, governor of the Slovenian central bank.

All times are London time.

14.26 And that’s that from Kranj. The ECB president painted a gloomy picture of the economic outlook, but there was little indication of what the central bank would do if conditions worsened.

14.25 Time for one more question. This one on the possibility of a conflict of interest between supervising banks and monetary policy. “We have to make sure that we have an organisation that ensures separation between monetary policy decisions and banking supervision,” Mr Draghi says.

14.20 Mr Draghi reiterates for the umpteenth time that the ball is now very much in the court of governments: “The ECB is there to make an environment that is conducive to reforms, but the decision is with governments,” he says.

14.15 Marko Kranjec, governor of Slovenia’s central bank, says the country’s borrowing costs “don’t reflect fundamentals.” The governor says he expects them to fall in the months ahead. A related question from Peter Spiegel:

[blackbirdpie url="https://twitter.com/SpiegelPeter/status/253845225406087168"]

Any takers? Read more