What caught my eye

1. The Bank of Japan's balance sheet is about to get much, much bigger, by Sober Look, via the excellent MacroDigest.

Here is why. Credit Suisse for example projects that Japan's inflation rate has peaked and is about to begin declining. In fact CS researchers see a complete divergence between the BoJ's own projection of inflation and reality. A number of other researchers (for example Scotiabank) agree.

2. Big Ideas in Macroeconomics, by Kartik Athreya. Noah Smith's excellent, three-part review makes me want to read it.

3. Is this an example of financial repression?

Federal Reserve officials have discussed whether regulators should impose exit fees on bond funds to avert a potential run by investors, underlining concern about the vulnerability of the $10tn corporate bond market.
The article is somewhat ambiguous on whether the exit fees would apply only to corporate-bond funds or to government-bond funds as well.

4. An organization I didn't know about: OMFIF, or Official Monetary and Financial Institutions Forum. They put together commentary, analysis, surveys, conferences, etc. around central banking. This week they were in the news because they published a report showing that "public-sector institutions" (including central banks, public pension funds, and sovereign funds) are buying more and more equities. The report is not available online.

5. Speaking about central banks, I just signed up for the "Grand Central" newsletter, the WSJ's blogging service about, well, central banking.

6. Blog recommendation. A mysterious Jesse Livermore writes (mostly) about the stock market on Philosophical Economics. I particularly enjoyed this post, but I would say everything he writes is worth reading.

7. The macroeconomic effects of asset purchases, by Martin Weale and Tomasz Wieladek on VOX EU. I am skeptical of the VARs (how are shocks identified?), but here it is anyways.

Our results suggest that an asset-purchase shock that results in an announcement worth 1% of nominal GDP leads to a rise in real GDP of about 0.36% in the US and 0.18% in the UK; and to a rise in the CPI of 0.38% in the US and 0.3% in the UK. These findings are encouraging, because they suggest that asset purchases can be effective in stabilising output and prices. The implied UK Phillips curve is steeper than in the US, meaning that the same change in output would have a relatively greater impact on UK inflation. Quantitatively, monetary easing leading to a 1% rise in output results in a 1% rise in the US CPI, whereas in the UK the CPI rises by 1.5%. These estimates of the inflation–output trade-off are similar to those that previous studies reported for conventional (interest rate-based) monetary policy. Table 1 compares the implied effect on output and prices with that reported in previous studies of unconventional monetary policy. For real GDP, our reported figures are very similar to those reported in previous studies. For the US, we also find a similar effect on the CPI, but for the UK, our results suggest that the impact on the CPI is almost three times as large as the effect reported in Baumeister and Benati (2013) and Kapetanios et al. (2012).

8. A note on Piketty and diminishing returns to capital. Highly recommended by Tyler Cowen.