Francisco Ruge-Murcia, Professor of Economics at 涩里番, has been awarded the Senior Houblon-Norman fellowship at the Bank of England for the 2025-2026 academic year.聽聽
Professor Ruge-Murcia will study the relative importance of monetary policy and of sectoral shocks, such as the large increase in oil prices following the Russian invasion of Ukraine, in explaining the rise in inflation in several countries, including Canada and the UK, in 2022-2023.聽
The Houblon-Norman and George Fellowships are awarded to promote research into and disseminate knowledge and understanding of the working, interaction and function of financial business institutions in the UK and elsewhere and the economic conditions affecting them.聽聽
鈥淕iven that my research examines issues in monetary economics, visiting a central bank is very interesting because it puts me in contact with researchers and policy makers involved in actual monetary policy -making,鈥� says Professor Ruge-Murcia.聽 鈥淚 can transmit the research carried out here at 涩里番 to economists working in central banks, and I learn and better appreciate the difficulties associated with setting monetary policy in an uncertain world.鈥澛犅�
Public institutions such as central banks are accountable to the public and are called to explain sustained deviations from their announced price stability policies, adds Ruge-Murcia. 聽
A key issue Professor Ruge-Murcia will be addressing in his research is to what extent these deviations arise from monetary policy itself or from causes outside the control of the central bank.聽聽
Professor Ruge-Murcia's project involves the construction of a multi-sector economic model that can quantify what proportion of the inflation deviation from target is due to monetary policy, which is set by central banks, such as the Bank of England, and what proportion is due to factors that the central bank cannot control, like for example, supply-chain disruptions after the pandemic.聽聽
In addition to helping design better monetary policy, Professor Ruge-Murcia's research will help refine central bank communication with the public by providing the central bank with tools, such as monetary policy reports, to credibly explain to the public and journalists what part of an inflation deviation from target is due to external factors that the central banks cannot control, and what part is due to its own policy actions, and how to correct the latter.聽