June 2022

Post n°276

Taking stock, two years after the launch of the PEPP

Published on 06/30/2022

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By Hadrien Camatte, Théophile Legrand and Aster Recoules

Net asset purchases by the Eurosystem under the Pandemic Emergency Purchase Programme (PEPP) were discontinued at the end of March 2022, two years after its launch. This programme successfully prevented the fragmentation of the euro area sovereign debt market in response to the Covid-19 pandemic and will continue to preserve the transmission of monetary policy through flexible reinvestment.

Chart 1: Reduction in fragmentation risk in the euro area since April 2020
Chart 1: Reduction in fragmentation risk in the euro area since April 2020 Source: Bloomberg, authors’ calculations. Note: Fragmentation is measured by the spread of the euro area GDP-weighted yield over the equivalent overnight indexed swap (OIS) rate.
Updated on 07/01/2022 09:43
Post n°275

What are business leaders’ inflation expectations?

Published on 06/23/2022

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By Paul Bouche, Julien Demuynck, Erwan Gautier, Frédérique Savignac

For the first time, the Banque de France is publishing the results of a survey on business leaders’ inflation expectations, collected since the end of 2021. One-year inflation expectations have increased since the beginning of the year and their median stands at 5% in the second quarter of 2022. Longer-term expectations (3-5 years) are also rising, but more slowly, with a median of 3%. This survey was conducted prior to the ECB's monetary policy normalisation announced on 9 June, which is expected to contribute to the gradual "re-anchoring" of inflation expectations.

Chart 1: Changes in inflation expectations since end-2021 in France (median in %)
Chart 1: Changes in inflation expectations since end-2021 in France (median in %) Note: median weighted by the number of employees in the company and the value added in the company's sector, 1% of the highest responses are not taken into account in the calculations. Source: IE-Banque de France survey.
Updated on 06/23/2022 16:33
Post n°274

The challenges of climate modelling for central banks

Published on 06/17/2022

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

Modelling is a key element in the Eurosystem's climate change action plan. Macroeconomic analysis and the preparation of monetary policy decisions are based on quantitative work in which models play a central role.

Chart 1: Economic impacts of climate change
Chart 1: Economic impacts of climate change Source : Authors’ analysis
Updated on 06/17/2022 08:52
Post n°273

Better Land-Use and Insurance to Mitigate Natural Disasters

Published on 06/10/2022

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By Céline Grislain-Letrémy  and Bertrand Villeneuve (Université Paris-Dauphine)

The rising costs of natural disasters over the last decades are largely explained by urbanisation in exposed areas. Land-use and insurance policies can limit this urbanisation. Simple frequently-observed policies, with prohibited red zones and zones without insurance tariff differentiation, are relatively efficient. It is critical that red zones be redefined to reflect changes in climate risks or population developments.

Chart 1: New Orleans
Chart 1: New Orleans Source: pixabay.com
Updated on 06/14/2022 10:33
Post n°272

Quality and Diversity of Research: a Ranking of Academic Journals

Published on 06/03/2022

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By Jean Barthélemy, Vincent Bignon, Régis Breton, Juan Carluccio and Gilbert Cette

In order to assess the quality of its research output, the Banque de France has constructed its own ranking of academic journals in economics and finance. The objective is to encourage the production of research on issues relevant to the Banque de France. This post explains the ten principles underlying the construction of this ranking.

Chart 1: Evolution of the number of authors of academic papers affiliated with one of the Eurosystem central banks on the REPEC website
Chart 1: Evolution of the number of authors of academic papers affiliated with one of the Eurosystem central banks on the REPEC website Source: Authors' calculations based on central bank ranking data from the REPEC website
Updated on 06/03/2022 08:36