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Post n°155
Published on 03/12/2020

What would the economic cost of a systemic firm going bust be? This post addresses this question by assessing the recessionary effect of a systemic default. Within two years, such an event is expected to be followed by a 3% decrease in aggregate consumption and by three more systemic defaults.

Source:  Gourieroux, Monfort, Mouabbi and Renne (2019)
Figure 1: Euro area probability of consumption dropping by more than 10% or 20% (horizon= 12 months) Source: Gourieroux, Monfort, Mouabbi and Renne (2019)
Post n°154
Published on 03/06/2020

By Nicoletta Berardi, Guillaume Gaulier, Karine Jean, Dominique Nivat & Soledad Zignago

The procedure for dealing with overindebtedness has been in existence for 30 years. Women have long been more vulnerable to it than men. In recent years, the overindebtedness procedure has affected the most financially vulnerable individuals, notably women raising children on their own. They account for 26% of overindebted women, almost three times their share in the total female population.

Chart 1: Admissible overindebtedness applications and proportion of women
Chart 1: Admissible overindebtedness applications and proportion of women Sources: Household overindebtedness typological surveys, authors' calculations.
Post n°153
Published on 02/28/2020

The United States has undergone significant macroeconomic changes over the past 30 years. Economic growth has been on a downward trend (except between 1995-2005), the labour share fell sharply in the late 1990s and sectoral concentration has increased to particularly high levels. These profound changes have been driven by the spread of information and communication technologies that have radically altered the structure of the market.

Source: Aghion et al. (2019). Note: Productivity trends in different sectors in the United States: IT producing, IT-intensive and other sectors.
Chart 1a: Productivity gains and information and communication technologies (in %) Source: Aghion et al. (2019). Note: Productivity trends in different sectors in the United States: IT producing, IT-intensive and other sectors.
Post n°152
Published on 02/13/2020

By Emilie Candus and Jean-Luc Le Goff

2019 saw very significant growth in labelled funds. With subscription rates higher than the industry average and broadly comparable levels of performance, the label is proving to be a factor of attractiveness for investors. However, the success of the labels is uneven and their penetration in the landscape of French collective investment management remains limited. Further educational and promotional efforts are still needed to step up the distribution of these products among savers.

Chart 1. Labelled funds accounted for only 7% of the French collective investment management market in 2019
Chart 1. Labelled funds accounted for only 7% of the French collective investment management market in 2019 Sources: Association française de la gestion financière (AFG – the French Asset Management Association), Banque de France and the French Ministries for the Economy and for Ecological Transition. Note: Estimate of the responsible investment collective man
Post n°151
Published on 02/04/2020

Over the cycle, monetary policy can be redistributional. Lower interest rates boost asset prices and lower borrowing costs but also increase employment and wages. But in the long run, monetary policy does not have systematic distributional effects; intergenerational transfers, globalisation, taxes and technological changes are the key fundamental drivers of inequality.

Chart 1: Wealth and income concentration at the top of the distribution in France and in the United States
Chart 1: Wealth and income concentration at the top of the distribution in France and in the United States Sources: Garbinti, Goupille and Piketty (2016), Piketty, Saez, and Zucman, (2016), wid.word. Note: Pre-tax national income share held by the Top 1%; net personal wealth share held by the Top 1%.
Post n°150
Published on 01/28/2020

The Taylor rule provides a natural paragon of short-term nominal interest rates, albeit one that is subject to considerable uncertainty. This post quantifies this uncertainty and shows how this quantification contributes to monetary policy assessment. It shows that, in 2019, short-term interest rates in the euro area were close to the middle of the benchmark interval thus obtained.

Chart 1: Distribution of Taylor rates, 2015-2019 Sources: Eurostat and author’s calculations. Note: The pink areas, from the darkest to the lightest, indicate the 50%, 70%, 80%, 90% and 95% confidence intervals of Taylor rates.
Post n°149
Published on 01/22/2020

By Stéphanie Lange-Gaumand (French Embassy in Japan), Baptiste Meunier and Brieuc Monfort (Sophia University, Japan, and FFJ-EHESS)

Japan is a special case in that it is one of the first countries to face an ageing population. It is also unique in terms of the magnitude of this demographic: the proportion of people over 65 years old is the highest in the world and its population is expected to fall by 40% by 2100. Japan seems to have accepted this population decline and has focused on controlling welfare spending, which reflects national preferences.

Chart 1 – Contraction and ageing of the population
Chart 1 – Contraction and ageing of the population Source: UN forecasts (2019)
Post n°148
Published on 01/17/2020

By Antoine Lalliard, Julien Le Roux, Marie Delorme and William Honvo

This post proposes a measure of property purchasing power by calculating the floor area in m² that an individual with an average income could buy with a housing loan (excluding deposits) in some of the largest euro area countries. After declining sharply in the 2000s due to rising house prices (with the notable exception of Germany), affordable floor area has increased since the 2008 crisis, mainly thanks to lower interest rates.

Chart 1: Floor area affordable on credit in m² by country
Chart 1: Floor area affordable on credit in m² by country Sources: Authors’ calculations; Banque de France, OECD, ECB, HouseLev.
Post n°147
Published on 01/07/2020

By Cyril Couaillier, Dorian Henricot and Julien Idier

At the end of 2018, “at-risk” firms in France were estimated to have total gross debts of EUR 187 billion. A 100 basis-point rise in their cost of financing could push this amount up by 60%, potentially posing a risk to the financial system. This result supports the measures taken by the High Council for Financial Stability (HCSF) as of 2018 to strengthen the resilience of the banking system.

Chart 1: Debt at risk of French groups
Chart 1: Debt at risk of French groups Source: FIBEN group data and authors’ calculations. Note: ICR = Interest coverage ratio, or the ratio of earnings to interest payments. Net leverage is defined as the ratio of debt net of cash holdings to total equity.
Post n°146
Published on 12/27/2019

By Patrick Branthomme and Véronique Genre

Three years after the launch of Eco Notepad, a survey has been conducted among its readers to get to know them better and to refine the thematic choices in the coming year. This is an opportunity to present the results and to thank all those who accepted to take part in this satisfaction survey.

Post n°144
Published on 12/13/2019

By Jean Barthélemy and Eric Mengus

The anchoring of inflation expectations results from an equilibrium between the private sector’s expectations of future central bank actions and the latter's actual actions. This equilibrium is often reduced to the question of a monetary policy rule. While the adoption of a rule helps in the formation of inflation expectations, it is not sufficient to anchor them permanently.

Post n°142
Published on 11/12/2019

By Bruno Cabrillac and Baptiste Meunier

The net international investment positions (NIIP) of the G20 countries have diverged since 1990. While this divergence results partly from persistent imbalances in goods and services, NIIPs have their own dynamics: the portfolio generates income and capital gains or losses. These dynamics have had a stabilising effect at the cost of financial risks for some debtors, i.e. the United States, and an excessive accumulation of safe assets by some creditors.

Chart 1 – Financial effects and real factors
Chart 1 – Financial effects and real factors Sources: Lane and Milesi-Ferretti (2017), authors’ calculations

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