Students, be part of the debate and take part in the Eco Notepad competition. The two best posts will be published on this site and will receive a prize of 3,000 and 1,500 euros.
Post n°270
Published on 05/16/2022

By Tristan Jourde

The Russian invasion of Ukraine led to a change in the structure of interconnections between financial markets. While the contagion effects have remained limited overall, the war has brought about new negative correlations between certain commodity indices (aluminium, oil, gold, silver, wheat) on the one hand, and equity markets, particularly in Europe, on the other.

Chart 1: Interconnections prior to the war in Ukraine Source: Refinitiv Datastream; author’s calculations. ISO codes : Australia (AUS), Canada (CAN), France (FRA), Germany (DEU), Italy (ITA), Japan (JPN), Netherlands (NLD), United Kingdom (GBR), United States (USA).
Post n°269
Published on 05/13/2022

So far in 2022, industry-level wage bargaining has generally resulted in wage increases of around 3% compared with rises of close to 1% in recent years. Inflation, which has been higher since the end of 2021, and the recent hike in the national minimum wage (NMW) are contributing to this stronger growth in negotiated wages.

Chart 1: Change in negotiated wages, the NMW and inflation (year-on-year % change)
Chart 1: Change in negotiated wages, the NMW and inflation (year-on-year % change) Source : INSEE (consumer price index – all households, and NMW), Banque de France (300 national, regional and departmental industries – private sector – wage floors).
Post n°268
Published on 05/11/2022

By Sebastian Stumpner

This blog post examines to what extent the recent surge in international transport costs has fuelled US import price inflation. While we find a moderate effect at the aggregate level, there are significant differences across products that are largely driven by the degree of containerisation.

Chart 1: The share of transport costs has increased only for containerised goods
Chart 1: The share of transport costs has increased only for containerised goods Source: Author’s calculations based on data from TradeDataMonitor.
Post n°267
Published on 04/28/2022

Rich households consume digital goods more intensively than poor households. As digitalisation makes some goods and services cheaper, higher-income households benefit more. Using US household data, this blog argues that the relative price effect of digitalisation is sizeable and amplifies the effects that digitalisation has on income inequality.

Chart 1: ICT intensity of consumption basket along the income distribution in the US
Chart 1: ICT intensity of consumption basket along the income distribution in the US Source: Arvai and Mann (2021) Note: The graph shows the share of information and communication technology (ICT) in the consumption basket by income percentile for different sub-periods.
Post n°266
Published on 04/20/2022

By Hyacinthe Buisson, Henri Fraisse and Matthias Laporte

The increasing use of artificial intelligence (AI) or machine learning (ML) techniques could allow banks to develop new credit risk models. These techniques could lead to substantial reductions in capital requirements. However, the opaque nature of these algorithms and the governance challenges they raise might make their adoption less attractive.

Chart 1: Neural network models could lead to substantial  reductions in capital requirements
Chart 1: Neural network models could lead to substantial reductions in capital requirements Source: Fraisse and Laporte (2022) forthcoming in the Journal of Banking and Finance.
Post n°265
Published on 04/01/2022

By Stéphane Dees, Jean-François Ouvrard and Pierre-François Weber

Macroeconomic and financial market disruptions linked to climate change and transition policies could affect the conduct of monetary policy. Climate risks could impair the monetary policy transmission channel, limit the monetary policy space for conventional tools and complicate the assessment of the monetary policy stance.

Chart 1: Inflation-output growth trade-off under a disorderly transition scenario
Chart 1: Inflation-output growth trade-off under a disorderly transition scenario Source: European Central Bank (ECB) calculations
Post n°264
Published on 03/28/2022

By Léa Le Quéau, Agathe Madeline and Paul Sabalot

The European Union is going to issue close to EUR 800 billion of debt to finance the NextGenerationEU recovery plan, making it one of the largest public debt issuers in the euro area. European debt has some key advantages that would make it ideal as a benchmark asset. However, it still needs to reach the critical mass required to ensure a sufficiently liquid secondary market.

Chart 1: NGEU debt yields are comparable to those of the highest rated euro area issuers Source: Authors’ calculations using Bloomberg data and median of Moody’s, S&P and Fitch ratings (data as at 18/03/2022).
Post n°263
Published on 03/22/2022

By Mathieu Gex, Marie-Aline Vives

In response to Russia’s military invasion of Ukraine, the Council of the European Union has adopted a series of restrictive economic and financial measures, including the exclusion of seven Russian and three Belarusian banks from the SWIFT global financial messaging system. This blog post explains the key role SWIFT plays in the international financial ecosystem.

Chart 1. Increase in daily SWIFT traffic over the last three years (in millions of messages)
Chart 1. Increase in daily SWIFT traffic over the last three years (in millions of messages) Source: SWIFT.
Post n°262
Published on 03/18/2022

By Léa Grisey

Financial stakeholders report numerous data gaps that hinder their consideration of climate-related risks. While the lack of reliable, comparable, granular and forward-looking data is a challenge, some temporary solutions may help overcome it. Furthermore, recent efforts should allow to gradually bridge those persistent gaps.

Chart 1: Data gaps across three main dimensions
Chart 1: Data gaps across three main dimensions Source: Network for Greening the Financial System (NGFS), Progress report on bridging data gaps (2021).
Post n°261
Published on 03/15/2022

A central bank’s inflation objective can be formulated using a point target, a target range or a combination of the two. In this blog, we show the disadvantages of a target range for anchoring inflation expectations and for macroeconomic stabilisation. The analysis thereby underpins the ECB’s adoption of a clear and symmetric 2% inflation point target.

Chart 1: Inflation objectives, Q2 2020
Chart 1: Inflation objectives, Q2 2020 Source: Central bank websites, authors’ illustration.
Post n°260
Published on 03/11/2022

By Bruno Cabrillac and Vincent Fleuriet

The Covid-19 crisis, combining supply and demand shocks with associated inflationary pressures, provides an opportunity to reassess the advantages of fixed exchange rate regimes over flexible or intermediate exchange rate regimes, in particular in Sub-Saharan Africa (SSA). Indeed, in this context, the anchoring of the currency via the fixed exchange rate gives more monetary policy space…

Inflation in Sub-Saharan Africa
Inflation in Sub-Saharan Africa Source: IMF (World Economic Outlook, Oct. 2021, dotted line = forecast) and Banque de France calculations.
Post n°259
Published on 03/08/2022

In several sectors, including academic economics, considerable efforts have been made over at least the past two decades to combat gender discrimination. One of the most frequently debated policies over recent years has been positive discrimination. Hiring or promoting an equally qualified woman over a man is argued to have a positive impact on all individuals in the profession as it will reduce prejudice and provide role models for younger women. Despite these efforts, women still appear to be vastly underrepresented amongst researchers in economic and earn far less credit than men for their academic work.

Figure 1: Proportion of female economists according to RePEc
Chart 1: Proportion of female economists according to RePEc Source: RePEc, Female representation in Economics and academic Rankings by country and for the world, as of February 2022.

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