Economic models often assume that the impact on the wider economy of changes in financial conditions can be summarised by a relatively limited range of financial variables, such as risk-free interest rates and long-term government bond rates. But changes in financial conditions can at times have...

This paper looks at disaggregated price data in the UK to see if there is evidence of downward nominal rigidity: are prices less likely to fall after a downward shock than they are to rise after an upward shock? The test is to see if, as the mean inflation rate falls, the skewness, or the...

This paper reports results from a survey by the Bank of England in 1995 to assess the extent of price-stickiness in 654 UK companies. In the year before the survey, firms on average reviewed prices monthly but changed them only twice. Time-dependent pricing was far more prevalent than...

A vital element of recent reforms to the UK architecture of financial regulation is the creation of a macroprudential authority at the Bank of England — the Financial Policy Committee (FPC). This article explains the role and powers of the FPC in relation to risks that threaten the resilience...

In this paper the popular Bernanke, Gertler and Gilchrist (BGG) model is used to explore links between the financial health of the non-financial corporate sector and bank lending behaviour on the one hand, and the effectiveness of monetary policy on the other. The model's microeconomic...

We develop a model in which countries can protect themselves against shocks by subscribing to a credit union that shares the key features of the International Monetary Fund, or by self-insuring through accumulating reserves. We assess the impact of the increasing heterogeneity of the Fund's...