October 2019

By Florian Lalanne and Irena Peresa

Responding to China’s greater capital account openness, major investment indices have started incorporating renminbi-denominated securities. This is expected to support portfolio inflows into China and increase the correlation between domestic asset prices and external factors. The consequences for other emerging markets are uncertain.

Composition of the MSCI Emerging markets index (%).
Chart 1: Composition of the MSCI Emerging markets index (%). Source: MSCI. Note: The index is composed of equity securities. China A-shares are renminbi-denominated equities traded in Shanghai and Shenzhen, while China offshore shares are mainly traded in Hong Kong.

While the duration of an expansion can intuitively be associated with its age, a study of historical GDP data for the euro area reveals that this is not the case. Old economic expansions are as likely to disappear as new ones. Like J. R. R. Tolkien's Elves, expansions are "biologically immortal": they do not die of old age, but of exogenous causes.

Chart 1 - The duration of expansions does not depend on their age
Chart 1 - The duration of expansions does not depend on their age Source: Author's calculations. The Durland and McCurdy (1994) model is applied to the euro area growth rate.

By S. Avouyi-Dovi and G. Horny

The Banque de France conducts a research patronage policy through partnerships and the action of its Foundation. The partnerships are collaborations with French research institutions, while the Foundation promotes research work by awarding grants and various prizes to researchers in France and abroad. What does the Banque de France’s research patronage consist in?

By Patrick Branthomme and Laurent Paul

Launched in September 2013 by the Chinese authorities, the “new silk road” project aims to better connect Asia and Europe. The latter must defend its economic interests and the multilateral framework to the best of its ability. To this end, it will be able to draw on the recent progress of the G20, which has established principles for the transparency of financing, the quality of infrastructure and compliance with environmental and corporate social responsibility standards.

Image: land and sea trade corridors of the “new silk road”
Image: land and sea trade corridors of the “new silk road” Source: Hong Kong Trade Development Council (HKTDC) Research

By Barbara Castelletti-Font, Pavel Diev and William Honvo

Severe financial market stress can result in significant errors in the forecasting of quarterly GDP growth. This post focuses on the impact of financial variables on the short-term forecasting of GDP in France. A financial conditions indicator can provide useful qualitative information to the forecaster on the risks associated with the baseline projection.

Severe financial market stress can result in significant errors in the forecasting of quarterly GDP growth. This post focuses on the impact of financial variables on the short-term forecasting of GDP in France. A financial conditions indicator can provide
Chart 1: Relationship between the Country-Level Index of Financial Stress (CLIFS) and GDP growth in France GDP quarter-on-quarter growth, 10% of the obs. with lowest GDP, rest of the obs. Sources: Banque de France, ECB and INSEE