Current economic developments

Post n°176
Published on 08/05/2020

By Annabelle de Gaye, Cristina Jude

In the wake of the Covid-19 crisis, the US authorities adopted an unprecedented set of fiscal measures, targeting households in particular. These measures aim at preserving the purchasing power of US households, but less than half of this additional income should be spent.

Chart 1. Compared fiscal policy responses 2020/2008
Chart 1. Compared fiscal policy responses 2020/2008 Source: Congressional Budget Office (CBO)
Post n°174
Published on 07/28/2020

By Barbara Castelletti, Marie Delorme, Pavel Diev, Yannick Kalantzis, Antoine Lalliard and Matteo Mogliani

The COVID-19 crisis has required a real-time monitoring of economic activity, which has not been possible with the usual data. However, by using high-frequency data, such as electricity consumption and credit card transactions, it has been possible to estimate the magnitude of the shock and the timing of the rebound at an early stage, for both industrial production and for household consumption.

Chart 1: Impact of the health crisis on household consumption and firms' electricity consumption  (%)
Chart 1: Impact of the health crisis on household consumption and firms' electricity consumption (%) Note: Deviation from a normal level (households) or from the historical average (firms). Household consumption is estimated by credit card transactions. Electricity consumption is adjusted for temperatures and working days.
Post n°169
Published on 07/03/2020

Climate policy has so far had limited results despite national commitments under the Paris agreement. Various scenarios establishing a cost-benefit balance of this policy bring to light the main obstacles it is facing. Its net gains are highly significant but remote in time and very unevenly distributed between countries.

Chart 1: Impact on world GDP of global warming and climate policies (as a % of GDP)
Chart 1: Impact on world GDP of global warming and climate policies (as a % of GDP) Source : Alestra, Cette, Chouard and Lecat (2020)
Post n°165
Published on 06/10/2020

Sharp increases in government debt have occurred in post-war periods. While inflation, albeit at times moderate, was the norm in the 20th century, this had not occurred in previous centuries, even though wars had led to similar increases in public debt. One of the reasons for this is that this debt was set aside in a sinking fund for repayment at a later date.

Chart 1: Inflation and government debt in the United Kingdom (1700-1950)
Chart 1: Inflation and government debt in the United Kingdom (1700-1950) Source: Bank of England
Post n°161
Published on 05/12/2020

History remembers Roosevelt for pulling the United States out of the Great Depression. He did it through communication – responding to the concerns of the American people – and by changing economic policy. His goal? To break out of the vicious circle in which pessimism amplifies a recession. Although the crises may differ, this blog looks at the lessons that we can learn from this strategy for the current crisis.

Franklin D. Roosevelt during one of his “fireside chats” in1934
Franklin D. Roosevelt during one of his “fireside chats” in 1934 Source: Harris & Ewing, Library of Congress
Post n°160
Published on 05/07/2020

By Mathilde Gerardin and Martial Ranvier

Using the additional comments collected at the end of the monthly business survey for March, we used text mining to construct indicators of how firms are adapting to the lockdown (short-time work, teleworking, etc.). This information provides an overview of the way industry-specific organisational structures are being adapted, and both confirms and expands on the findings of the survey.

Chart 1: Features of the 3 industry clusters
Chart 1: Features of the 3 industry clusters Source: The Banque de France's monthly business survey (MBS).
Post n°159
Published on 04/27/2020

The current recession is expected to be shallower than the Great Depression of 1929, but deeper than the Great Recession of 2008. It could be shorter than these two financial crises because of the temporary and exogenous nature of the shock that caused it. It could contribute to the deployment of the digital economy, thereby boosting productivity and growth.

Chart 1a: The current recession compared to previous ones. Euro Area.
Chart 1a: The current recession compared to previous ones. Euro Area. Source: www.longtermproductivity.com Note: (GDP growth in %, periods of war in dotted lines, IMF forecast in orange)
Post n°158
Published on 04/20/2020

By Clémence Berson, Hadrien Camatte and Sandra Nevoux 

The short-time work mechanism has recently been bolstered to limit the repercussions of the Covid-19 pandemic on employment. By preventing dismissals due to temporary difficulties, the reduction in hours worked allows firms to preserve their human capital and will foster the resumption of activity. Certain windfall effects should nevertheless be avoided, outside crisis periods, even though they generally remain minor compared with the benefits of such schemes during times of crisis.

Short-time work: a useful tool in times of crisis.
Chart 1: Development of short-time work in France due to Covid-19 (1 March – 14 April 2020). Source: Dares. Note: In France, the number of requests for short-time work due to Covid-19 amounted to 904,000 at 14 April 2020, representing 8.7 million employees (34% of salaried employment).
Post n°157
Published on 04/15/2020

Covid-19 is a public health emergency. Economic activity has been suspended due to the necessary confinement measures taken almost everywhere in the world. The targeted policies of major central banks to address this economic crisis share many common features but differ in details and labels.

Chart 1: Timeline of central banks’ main responses to the Covid-19 crisis.
Chart 1: Timeline of central banks’ main responses to the Covid-19 crisis. Source: Banque de France.
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.

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