Long term growth

Post n°82
Published on 08/30/2018

Growth in advanced economies has slowed in successive stages since the 1970s. Are we likely to see a return to the growth rates observed in the 20th century? The main uncertainty lies in the pace and diffusion of technological progress. Under a secular stagnation scenario, growth is expected to remain below 1.5% in advanced economies in the period up to 2060, compared with close to 3% in the case of a new technology shock.

Chart 1: Scenarios for GDP growth up to 2060: Contributions to GDP growth
Chart 1: Scenarios for GDP growth up to 2060: Contributions to GDP growth Source: Cette, Lecat, Ly-Marin (2017) Note: Secular stagnation = Sec. stag.; Technology shock = Tech shock. Annual average % growth 2018-60; contributions in percentage points. The contribution of labour is the total number of hours worked.
Post n°73
Published on 06/21/2018

By B. Cabrillac, L. Jacolin, A. Noah

The intensification of competition in Sub-Saharan African (SSA) countries has had an ambivalent impact on credit risk. The resulting improvement in management and bank intermediation may, beyond a certain threshold, be offset by greater risk-taking. Strengthening prudential frameworks would make it possible to harness the opportunities offered by bank competition.

Chart 1: Does bank competition reduce or increase credit risk in SSA?
Chart 1: Does bank competition reduce or increase credit risk in SSA? Source: Brei et al., 2018. Relationship between the degree of bank competition (the Lerner index, between 0 and 1, measures banks’ market power) and credit risk (NPL, non-performing loans / gross loans)
Post n°59
Published on 04/11/2018

By Pierre Sicsic

In France in 2016, the gross margin rate of non-financial corporations (NFCs) returned to its early 2000s level, at 32%, while the net margin rate was 15%, compared with 18% in the 2000s. Thus, using aggregates "net" of capital depreciation gives a different picture of the NFCs account. Furthermore, the NFCs' net saving rate would be close to zero, and their stock of fixed capital could only increase through external financing.

Chart 1: gross and net margin rates of French NFCs Source: Insee, table 7.101 – non-financial corporations account (S11).
Post n°58
Published on 04/04/2018

This study shows that budget-neutral measures – i.e. changes in the composition of fiscal revenue and spending that leave the ex-ante total government budget unchanged – can boost economic growth. However, not all households are equally affected by these measures. In addition, measures implemented when monetary policy is accommodative have larger macro effects.

Figure 1: GDP and private investment Figure taken from Bussière et al (2017)
Post n°43
Published on 01/09/2018

Antonin Bergeaud, Gilbert Cette and Remy Lecat

A large proportion of economic growth remains unexplained by labour and capital factors. When the quality of these factors and the diffusion of innovation are taken into account, the unexplained share is reduced by roughly half. We thus remain ignorant as to the sources of a significant share of growth.

Post n°29
Published on 09/13/2017

In France, there has been a marked deterioration since the 1970s in the ability of young low-income households to get on to the property ladder. Aside from the problem of house prices and borrowing conditions, this can in part be attributed to demographic changes, notably an increase in single-parent families and in urban migration. Financial assistance, such as cash gifts or inheritance, is widening the gap between the poorest and wealthiest young households.

Post n°25
Published on 07/12/2017

In 2017, French growth is expected to accelerate to around 1.6%. In addition to support from monetary policy, ambitious structural reforms are necessary to raise the current potential growth rate, which is only just below 1.25%. These reforms need to focus on education, vocational training, and labour and competition law.

Published on 12/13/2016

By Rémy Lecat with Antonin Bergeaud and Gilbert Cette

Standard of living has slowed continuously over the past decades in most developed economies, mainly due to a productivity slowdown. Have we entered a period of secular stagnation? In fact, many countries still have a significant catch-up potential, even in Europe, but to achieve this catch-up, the implementation of structural reforms is required.