World Banking Abstracts, vol. 35, no. 1, 2018, Page 37
E POLICY, LAW AND REGULATION
E1 GENERAL ECONOMIC POLICY
The 2018 ageing report: underlying assumptions and projection methodologies
EC European Economy Institutional Papers, no. 65 (November), pp. 1-220
Ageing populations present a challenge to fiscal sustainability that must be accurately anticipated so that suitable preparations can
be made. Consequently, the Economic Policy Committee was instructed by the ECOFIN Council to produce long-term budgetary
forecasts based on population projections. This current report describes the underlying macroeconomic assumptions and
methodologies employed to arrive at age-related expenditure projections for each individual EU country. These projections identify
the countries that face particular problems and the rate at which age-related expenses will accelerate. (79 tables, 20 figures,
An overview of the Survey of Consumer Expectations
Armantier, O. et al.
Federal Reserve Bank of New York Economic Policy Review (USA), vol. 23, no. 2 (December 2017), pp. 51-72
Each month, the Federal Reserve Bank of New York conducts a Survey of Consumer Expectations. This online survey of
household heads collects high-frequency data regarding expectations about household finances, inflation, the housing market and
labour market. This insight can be used to better understand how expectations are formed and explore the relationship between
expectations and behaviour. This report explains the questionnaire design, how the survey is implemented and the way in which the
statistics are analysed and interpreted each month. (3 tables, 3 figures, references)
Household optimism and overborrowing
Hyytinen, A. and Putkuri, H.
Journal of Money, Credit and Banking (USA), vol. 50, no. 1 (February 2018), pp. 55-76
When households make inaccurate financial forecasts, this can have implications for their approach to borrowing and future over-
indebtedness. Applying Finnish household-level data for the period 1994-2013, this study confirms that households that make
overly optimistic forecast errors are inclined to amass larger debt-to-income ratios and struggle to repay what they owe. In contrast,
households that make pessimistic forecast errors suffer no ill effects. (5 tables, references)
E2 MONETARY POLICY
Is there a debt service channel of monetary transmission?
Hofmann, B. and Peersman, G.
Bank for International Settlements Quarterly Review, (December 2017), pp. 23-37
An attempt is made to confirm what effect monetary policy shocks have on debt service ratios in a sample of eighteen countries. As
monetary policy is tightened, this results in a sizeable increase in debt service ratios that persists over time. In effect, the rise in
lending rates has a greater effect than any reduction in the ratio of debt-to-income. In addition, it is observed that monetary policy
shocks have a greater impact on debt service ratios in economies that have particularly high levels of indebtedness. (4 figures,