Mauricio Salgado-Moreno

A game-theoretic foundation for the fiscal theory of the price level Staff working papers set out research in progress by our staff, with the aim of encouraging comments and debate.

Staff Working Paper 1137 by Tim Willems (BoE) and Thomas Norman (Oxford) examines the importance of fiscal-monetary interactions for inflation outcomes via a game-theoretic approach. 🔗 Read the paper here: www.bankofengland.co.uk/working-pape...

A graph of GDP per capita growth in the G7

Here's each G7 country's cumulative increase in real GDP per capita, since just before the pandemic:

🇺🇸 +9.9%
🇮🇹 +7.3% (thru Q1)
🇯🇵 +3.1% (thru Q1)
🇫🇷 +2.4% (thru Q1)
🇬🇧 -0.1% (thru Q1)
🇨🇦 -1.1% (thru Q1)
🇩🇪 -1.9% (thru Q1)

This is the second largest 2m revision on record. In general they get larger at cyclical turning points. We take more signal that we are at a cyclical turning point than that there is some data collection conspiracy

There's a science reason! A bunch, actually. Air conditioners are heat pumps, they move heat around rather than needing to create something from scratch, which is more efficient.

A feature not a bug − speech by Megan Greene Speech given at the National Institute of Economic and Social Research

I gave a speech today at @NIESRorg looking at how the BoE, ECB and Fed manage their balance sheets, whether the differences bw them create trading opportunities for banks to book profits and whether I need to worry about this as an MPC member.👇
b-o-e.uk/44dbxCb

a timeline graph of Trump's 2nd-Term tariffs

The court ruling against many of Trump's tariffs today would lower US overall tariff rates by roughly 10%, only leaving the tariffs on cars, steel, & aluminum

If it holds (a very big if) tariffs would drop to the lowest rate since March & importers would get retroactive relief

Trump's Retreat Still Leaves Tariffs at 90-Year Highs China Tariffs Are Now Below "Embargo" Levels, but Overall Tariffs are at the Highest Rate Since the Great Depression

NEW from me:

Trump's 90-day pause on the China trade war still leaves tariffs at the highest level since the Great Depression—and that's before upcoming sector-specific tariffs or possible un-pausing

Trump may be easing his trade war, but he's far from ending it🧵
www.apricitas.io/p/trumps-ret...

Finally, while this particular channel might imply MP fueled inflation (still not convinced about this), wouldn’t we still expect that an activist easing policy to boost demand and inflation even more? Or is the implicit assumption that rental prices would fall leading to deflationary effects? 🤔

Also, migration as driver of higher rental inflation is consistent with Canada similar profile. (See www.gov.uk/government/p...)

Interesting blog, but I wouldn’t attribute too much of the rental inflation to MP (haven’t read the paper but seems that MP shocks are not identified,no?). Especially as Brexit and migration over the past years are probably more relevant structural drivers of the increase in rental demand, no?

As well as the White Paper, the Home Office published a lot of very useful research yesterday.

Funnily enough, this chart didn't make it into the White Paper.

[NB median PAYE earnings for all employees was £28K]

www.gov.uk/government/p...

A complicated diagram that shows which workers are in most demand.

The horzontal axis is some measure of supply shortage. Size of the circle is how many jobs there are for that vocation.

As I understand it, government policy is that it will reduce the supply of care workers.

One again, this is simply not true.

Non-UK origin employeea have (slightly) higher median earnings than UK-origin ones -and the gap has if anything widened (slightly) recently.

a graph of G7 gdp per capita growth, as described in the tweet

Here's each G7 country's cumulative increase in real GDP per capita, since just before the pandemic:

🇺🇸 +9.3%
🇮🇹 +6.9% (thru Q4)
🇯🇵 +3.1% (thru Q4)
🇫🇷 +1.8% (thru Q4)
🇬🇧 -0.9% (thru Q4)
🇨🇦 -1.4% (thru Q4)
🇩🇪 -2.1% (thru Q4)

If it weren't for the tariffs, this would be one of the biggest stories right now.

Impossible to make any coherent comment on something so mind-boggling stupid.

Trump announces his tariffs, which are (somehow?) related to the trade barriers other countries are imposing on the U.S.

But...
THE NUMBERS HE'S PRESENTING BEAR NO RELATION TO REALITY.

It would be absurd to call these reciprocal tariffs. They're grievances.

I remember when Brexit seemed the height of stupidity and self harm. Seems almost quaint now.

Managing liquidity in a changing environment The European Central Bank (ECB) is the central bank of the European Union countries which have adopted the euro. Our main task is to maintain price stability in the euro area and so preserve the purch...

Last year we announced our new #OperationalFramework. In an @ecb.europa.eu blog post, the Chair of the Supervisory Board Claudia Buch and I discuss the role that central bank operations are to play in banks' liquidity management under the operational framework. 1/7

www.ecb.europa.eu/press/blog/d...

The War on Government Statistics Has Quietly Begun What the elimination of an obscure advisory committee on economic data says about the administration’s commitment to relevance and accuracy.

My @opinion.bloomberg.com piece today is on the disbanding of the Federal Economic Statistics Advisory Committee. Yes, it’s wonky and yes, it matters! In uncertain times, we need high quality data more than ever.
www.bloomberg.com/opinion/arti...

Finanzpolitik: Das eigentliche Problem sind die verdeckten Schulden Trotz des Megapakets von Union und SPD: Eine grundlegende Reform der Schuldenbremse ist dringend notwendig. Nur dann leben die Alten nicht mehr auf Kosten der Jungen.

Das eigentliche Problem sind die verdeckten Schulden

Trotz des Megapakets: Eine grundlegende Reform der #Schuldenbremse ist dringend notwendig. Nur dann leben die Alten nicht mehr auf Kosten der Jungen.

Mein Vorschlag für eine generationengerechte Schuldenbremse:

www.zeit.de/wirtschaft/2...

OBR publishes supplementarly analysis of fiscal impact of migration.

Confirms earlier analysis :

- the "average migrant" [in their data] earns slightly *more* than the UK average

- the "average migrant" makes a more +ve fiscal contribution than average resident

obr.uk/docs/dlm_upl...

🧵 In today’s Bank Underground post, Michal Stelmach (BoE), James Kensett (BoE) and Philip Schnattinger (BoE) investigate how best to measure labour market tightness… bankunderground.co.uk/2025/03/06/w...

Exempting USMCA-compliant auto imports from tariffs would lessen the impact of Trump's trade war, sparing ~$122B in imports (~$170B if parts are exempted)

But it just highlights the ridiculousness of this whole endeavor—why exempt cars but not oil, tomatoes, computers, etc etc?