Post n°302

Housing subsidies: a smaller upward impact on rents if supply adjusts

Published on 01/30/2023

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By Céline Grislain-Letrémy and Corentin Trevien (CREST-ENSAE)

We evaluate the long-term effect of housing subsidies on the price, quantity and quality of private rental accommodation in France. The overall upward effect on rents is accompanied by an increase in the total number of dwellings. These effects depend on the market segment. They have not proved long-lasting for small dwellings, which have increased in quantity.

Chart 1: Share of housing subsidies in French GDP
Chart 1: Share of housing subsidies in French GDP
Updated on 01/30/2023 08:29
Post n°301

Negotiated wage increases: what is the picture for 2022?

Published on 01/20/2023

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By Erwan Gautier

Industry-level wage bargaining for 2022 was impacted by the high inflation context. Over the year, close to 150 industries revised the agreements signed at the end of 2021 or beginning of 2022. Overall, at the end of the year, negotiated wage increases amounted to an average of 5% year-on-year (compared with 3% at the beginning of the year). However, this higher increase in negotiated wages does not, at this stage, point to the start of a wage-price spiral.

Chart 1: Changes in negotiated wages, the national minimum wage, the average wage per capita (adjusted for the effects of the job retention scheme) and inflation (year-on-year, %)
Chart 1: Changes in negotiated wages, the national minimum wage, the average wage per capita (adjusted for the effects of the job retention scheme) and inflation (year-on-year, %)
Updated on 01/20/2023 10:48
Post n°300

The stages in France’s European financial integration

Published on 01/12/2023

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By Iris Chagnaud, Jean-Baptiste Gossé, Florian le Gallo and Rémy Lecat

France’s European financial integration, measured by its capital flows to its main partners, accelerated strongly with the introduction of the euro and European measures designed to unify financial services. It fell back significantly with the global financial crisis and then the euro area debt crisis. Its recovery in 2018-19 has since been tested by the Covid-19 and energy crises.

Chart 1. France’s net capital flows abroad (1980-2021, % of GDP)
Chart 1. France’s net capital flows abroad (1980-2021, % of GDP) Source: BDF and BIS, authors’ calculations.
Updated on 01/12/2023 10:05
Post n°299

New indicators of perceived inflation in France based on media data

Published on 12/27/2022

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By Jean-Charles Bricongne, Olivier de Bandt, Annabelle de Gaye, Julien Denes, Paul Hubert, Pierre-Antoine Robert

The recent rise in inflation could affect households' and businesses' perception of inflation. This post describes new indicators of perceived inflation in France constructed from alternative data: newspaper articles and messages from the social network Twitter. The advantage of such data is that they are available at high frequency and in real time.

Chart 1. Indicators of perceived inflation based on media data (standardised and rescaled) Sources: Factiva, Twitter, European Commission, authors' calculations.
Updated on 12/27/2022 09:49
Post n°298

Dynamics and Implications of the Recent Rise in Wheat Prices

Published on 12/23/2022

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By Raj Rajesh, Paul Vertier, Thibault Lemaire, Arthur Stalla-Bourdillon, and Aude Le Metayer

The increase in global wheat prices in the last two years, especially after the start of the Ukraine war, reflects a strong market integration and a high dependence on energy and fertiliser prices. As several developing countries depend on a small number of wheat exporters, curbing food insecurity will require coordinated action and crop diversification.

Chart 1: International export prices (free on board) of wheat in different markets
Chart 1: International export prices (free on board) of wheat in different markets Source: FAO
Updated on 12/23/2022 14:00
Post n°297

The euro area welcomes its 20th member, Croatia, on 1 January 2023

Published on 12/19/2022

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By Violaine Faubert and Florian Le Gallo

Ten years after joining the European Union, Croatia will adopt the euro on 1 January 2023, thus becoming the 20th member of the euro area after Lithuania. The adoption of the euro, which is achieved by complying with the convergence criteria, will reduce the exchange rate risk. Lower transaction and financing costs will strengthen trade and financial integration, thereby promoting real convergence.

Chart 1: Croatia's exports and imports with its main trading partners in 2021
Chart 1: Croatia's exports and imports with its main trading partners in 2021 Source: Eurostat, balance of payments. Note: trade flows broken down by partner country and product. Croatian exports of goods to Germany account for 11% of its total exports of goods.
Updated on 12/19/2022 09:13
Post n°296

Remote working: a new dynamic in the labour market?

Published on 12/12/2022

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By Pierre-Emmanuel Caplet - 2nd prize in the 2022 Eco Notepad competition - Masters student at Paris-Saclay Ecole Normale Supérieure (ENS)

Despite the pandemic’s abatement, teleworking seems to be holding steady. This new working arrangement could have several consequences for the labour market: reduced business costs; greater worker flexibility; more rapid digitalisation; and new geographical and sectoral dynamics.

Chart 1: Teleworking in 2021
Chart 1: Teleworking in 2021 Source: INSEE, Labour Force Survey, 2021. Note: Scope covers France excluding Mayotte, people living in ordinary housing, employees working at least one hour of paid work a week.
Updated on 12/12/2022 18:36
Post n°295

Teleworking : an opportunity to reduce frictional unemployment

Published on 12/12/2022

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By Lili Vessereau
1st prize in the 2022 Eco Notepad competition
Second year student for the Master's degree in Corporate & Public Management at Sciences-Po Paris

By shortening the number of days spent on-site at their workplace, teleworking can, under certain conditions, broaden job seekers’ geographical search perimeter. By reducing the rigidities linked to geographical mobility, teleworking could thus contribute to lowering frictional unemployment.

Chart 1: Beveridge curve
Chart 1: Beveridge curve Source: DARES according to INSEE, business survey and employment survey
Updated on 12/12/2022 18:30
Post n°294

Natural disasters: exposure and underinsurance

Published on 12/08/2022

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By Céline Grislain-Letrémy

Overseas households are more exposed to natural disasters than in mainland France, with a 20% increase in the sinistrality expected by 2050. However, far fewer of them are insured. Insurance supply is developed and regulated. The low subscription is mainly due to uninsurable housing and the anticipation of assistance.

Figure 1 : Effects of Hurricane Maria, Guadeloupe, 2017
Figure 1 : Effects of Hurricane Maria, Guadeloupe, 2017 Source: https://commons.wikimedia.org/wiki/File:Dégats_Ouragan_Maria_(Aprés_son_Passage).jpg
Updated on 12/08/2022 17:25
Post n°293

How much do China’s regional lockdowns affect international trade?

Published on 12/02/2022

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By Sebastian Stumpner

As part of its zero-Covid policy, China uses regional lockdowns to limit the spread of the virus. This blog estimates the effect of these regional lockdowns on Chinese trade. While most lockdowns have no noticeable effect, lockdowns of very high stringency are continuing to depress trade. The particularly stringent Shanghai lockdown in April 2022 reduced aggregate Chinese trade by 3-4%.

Chart 1: Exports of Shanghai Province collapsed during the Shanghai Lockdown
Chart 1: Exports of Shanghai Province collapsed during the Shanghai Lockdown
Updated on 12/02/2022 08:44
Post n°292

How well have ECB rate hikes been transmitted to the money market?

Published on 11/25/2022

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By Benoit Nguyen and Miklos Vari

Since July, the ECB increased its key interest rates by 200 basis points in total (once by 50bps and twice by 75 bps). These are the largest single rate hikes of the ECB key interest rates. In this post, we examine to what extent these changes of policy rates passed through to the money market, the first step of monetary policy transmission. Transmission has been nearly complete in the unsecured market (e.g. on €STR) but subdued in the secured market (i.e. on repo transactions).

Graph 1: Changes for unsecured money market rates from July to November 2022
Graph 1: Changes for unsecured money market rates from July to November 2022 Source: ECB, Statistical Data Warehouse. Note: DFR stands for Deposit Facility Rate.
Updated on 11/25/2022 08:58
Post n°291

Sustainability-linked bonds, an effective tool for decarbonisation?

Published on 11/18/2022

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By Pauline Bacos and Naelle Verniest

Sustainability-linked bonds (SLBs) have an innovative format that links the bond’s coupon to the achievement of environmental, social or governance targets. Many SLBs now include targets for reducing greenhouse gas emissions. However, this mechanism must impose greater constraints on issuers in order to become a real decarbonisation tool.

Chart 1: Mechanisms of SLBs
Chart 1: Mechanisms of SLBs Source: Banque de France. Note: A step-up is a coupon increase applied if an environmental, social and governance (ESG) target is not achieved. A step-down is a coupon decrease applied if an ESG target is achieved. These mechanisms are defined at issuance
Updated on 11/18/2022 16:55

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