Current economic developments

Post n°154

Overindebtedness, women and single parenthood

Published on 03/06/2020

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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.
Updated on 03/06/2020 14:53
Post n°153

Falling growth and rising rents in the United States

Published on 02/28/2020

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By Antonin Bergeaud

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.
Updated on 02/28/2020 15:46
Post n°141

The technological revolution: between hopes and concerns

Published on 11/06/2019

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1st prize-winning blog in the 2019 Eco Notepad Challenge - By Nicolas Laine (ESCP)

The technological revolution raises numerous questions as it permeates every aspect of our daily lives. Real hopes or legitimate concerns? To separate true from false, let’s take a look at this conversation between two friends, overheard in rue Croix des Petits Champs…

Source: author, with the help of Ariane Mostamandy (drawings)
Updated on 02/14/2020 12:05
Post n°139

Will the euro area’s economic expansion die of old age?

Published on 10/25/2019

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By Stéphane Lhuissier

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.
Updated on 02/13/2020 16:28
Post n°136

Are financial variables a useful complement for GDP nowcasting?

Published on 10/11/2019

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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
Updated on 02/13/2020 12:49
Post n°126

Strengthening the Global Financial Safety Net in the face of heightened risks

Published on 07/30/2019

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By Ludivine Berret, Marie-Hélène Ferrer and Céline Rochon

In a world marked by reduced fiscal and monetary leeway and heightened risks, a strengthened Global Financial Safety Net is desirable, in addition to better macroeconomic policy coordination. This issue, discussed under the French G7 Presidency, calls for a renewed multilateralism (see the blog on “The G7, an engine for multilateralism”).

Chart 1: Evolution of the size and composition of the Global Financial Safety Net
Chart 1: Evolution of the size and composition of the Global Financial Safety Net Source: IMF, Adequacy of the Global Financial Safety Net, 2016.
Updated on 02/11/2020 11:42
Post n°125

Where is euro area inflation in relation to the “Phillips cone”?

Published on 07/26/2019

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By Clémence Berson, Hadrien Camatte, Antoine Lalliard and Julien Le Roux

The “Phillips cone” is a range of possible values for inflation obtained using different specifications of the Phillips curve. The Eurosystem’s June 2019 projection for euro area inflation is slightly below the median forecast in the Phillips cone for the entire projection horizon, and even slightly below the cone at the start of the horizon. This suggests that the Eurosystem’s projection is fairly prudent.

Chart 1: The euro area projection is prudent relative to the Phillips cone
Chart 1: The euro area projection is prudent relative to the Phillips cone Source: Eurostat, Eurosystem, authors’ calculations Note: after the first quarter of 2019, the black line shows the Eurosystem’s June 2019 projection.
Updated on 02/11/2020 11:31
Post n°120

Forecasting in an Uncertain Economic Environment

Published on 07/09/2019

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By Florens Odendahl (Banque de France)

If we consider that future economic outcomes are inherently uncertain, this gives rise to the notion of economic risk. For instance, what is the probability of a contraction in future GDP growth? Extending this idea to the case of several variables, we can address questions about the joint development of risks to GDP growth and inflation, for example.

Figure 1: The central tendency alone does not reflect information about macroeconomic risk
Figure 1: The central tendency alone does not reflect information about macroeconomic risk Source: Adrian et al. (2019) Note: one-year-ahead density forecasts of US real GPD growth.
Updated on 02/17/2020 15:05
Post n°116

What are the financial risks to euro area growth?

Published on 05/27/2019

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By Naomi Cohen, Laurent Ferrara, Matteo Mogliani and Jean-Guillaume Sahuc

Monetary policy decisions require a prior assessment of different economic scenarios, including the most extreme ones. Assessed on the basis of the Banque de France's Financial Conditions Index, financial risks that are likely to weigh on the distribution of future euro-area GDP growth appear limited.

Expected distribution of euro area quarterly GDP growth between 2001 and 2018
Chart 1: Expected distribution of euro area quarterly GDP growth between 2001 and 2018 Sources: Eurostat, Banque de France, authors' calculations.
Updated on 02/17/2020 11:37
Post n°110

The impact of structural reform on rent creation, rent sharing and productivity

Published on 03/28/2019

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By Gilbert Cette, Jimmy Lopez and Jacques Mairesse

The positive effect on productivity of reducing product market regulation and employment protection legislation has been extensively documented and analysed, leading to many structural reforms in OECD countries. On the basis of new measures of rent creation and rent sharing, we show that further product market deregulation could substantially increase productivity, notably in France and Italy.

Chart 1: Expected total factor productivity gains from product market deregulation
Chart 1: Expected total factor productivity gains from product market deregulation Sources: Authors’ calculations assuming a switch to the most pro-competitive regulations
Updated on 02/14/2020 10:32

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