November 2021

Post n°241

The ECB mandate through the lens of the new monetary strategy

Published on 11/30/2021

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Yolaine Fischer and Giulia Sestieri

People’s views diverge as to which economic priorities the ECB should focus on. After recalling the economic rationale of the ECB mandate, as well as the legal framework, this posts gives some insights into the reasons why its new strategy takes account of other considerations, such as climate change, in the way in which the ECB fulfils its mandate.

Chart 1. What is the primary objective of the ECB monetary policy?
Chart 1. What is the primary objective of the ECB monetary policy? Source: Survey conducted by Kantar on behalf of the Banque de France in October 2020 by phone. Note: Sample: 1,005 individuals, 18 years and over.
Updated on 11/30/2021 18:07
Post n°240

A clear and symmetric 2% inflation target for the ECB

Published on 11/24/2021

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Martina Cecioni, Günter Coenen, Rafael Gerke, Hervé Le Bihan, Roberto Motto, Adrian Penalver

In July 2021, the ECB announced that its price stability objective is best served by a 2% inflation target over the medium term. This clear and symmetric inflation target reinforces the buffer against deflation risks and supports the anchoring of inflation expectations.

Chart 1: Inflation in the euro area, 1999 until June 2021
Chart 1: Inflation in the euro area, 1999 until June 2021 Source: ECB.
Updated on 11/24/2021 18:00
Post n°239

The analysis behind the ECB’s Strategy Review

Published on 11/24/2021

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By Adrian Penalver

In July 2021, the ECB announced a new monetary policy strategy. Behind the scenes, staff of the Eurosystem produced a comprehensive and detailed analysis to support the Governing Council. This blog summarises the main outcomes and will provide links to future blogs explaining the background material.

Source: European Central Bank
Updated on 11/24/2021 17:33
Post n°238

The collapse of French exports in the Covid crisis: mainly those of large business units

Published on 11/12/2021

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By J.-C. Bricongne, J. Carluccio, L. Fontagné, G. Gaulier and S. Stumpner

The Covid-19 crisis led to a collapse of French exports in April and May 2020. Using customs data, we investigate the role of the performance of individual exporters. Although the number of exporters contracted by roughly a quarter, excluding aeronautics, it was the reduction in exports of the hundred or so largest exporters (representing 36% of French exports before Covid) that accounted for approximately half of the decline observed at the aggregate level.

Chart 1: Largest exporters contributed more than their pre-crisis share (April-May 2020 relative to April-May 2019)
Chart 1: Largest exporters contributed more than their pre-crisis share (April-May 2020 relative to April-May 2019) Source:  Authors' calculations based on Customs data.
Updated on 11/12/2021 16:19
Post n°237

Monetary policy, fragmentation risks and the euro

Published on 11/04/2021

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By Klodiana Istrefi, Maria Sole Pagliari and Urszula Szczerbowicz

The ECB’s monetary policy can affect the euro through sovereign spreads. A policy surprise that reduces sovereign spreads during the ECB press conference will lead to an appreciation of the euro. This relationship is generally observed when redenomination risk is high, suggesting that monetary policy counters fragmentation risks, thus supporting the solidity of the euro.

Chart 1: EUR/USD exchange rate vs. 10-year sovereign spreads in the euro area. Note: Sovereign spreads are calculated with respect to the 10-year German Bund. Sources: Banque de France, Bloomberg.
Updated on 11/04/2021 19:37