The results of the 2020 Eco Notebook contest will be announced this autumn. The date and terms of the award ceremony will be communicated later.
Post n°100
Published on 01/16/2019

Financial conditions are not fully captured by the short-term interest rate, especially when it is stuck at its lower bound. As a result, financial institutions and central banks turn to other indicators richer in information such as financial condition indices (FCI). We provide a new FCI with time-varying component weights which pinpoints the sources of changes in financial conditions.

Dynamics of the Banque de France FCI for the euro area
Chart 1: Dynamics of the Banque de France FCI for the euro area Sources: Bloomberg and the authors’ calculations
Post n°99
Published on 01/15/2019

By Pierre Guerin, Adrian Penalver and Pierre-Francois Weber

Excess liquidity in the euro area has risen by less than the liquidity created by unconventional monetary policy measures. This is because much liquidity has been absorbed by non-monetary deposit accounts held by national central banks. As monetary policy normalises, liquidity will become scarcer. At what point this scarcity will cause interbank rates to drift above the deposit facility rate will depend on whether this “autonomous” demand remains high.

Chart 1: Excess liquidity at extraordinary high levels due to unconventional monetary policy Source: ECB Statistical Data Warehouse. Broken lines correspond to the period in which the Eurosystem switched to 8 from 12 maintenance periods per year. EAPP: Expanded Asset Purchase Programme
Post n°98
Published on 01/11/2019

After the ECB’s Governing Council Monetary policy meetings, market uncertainty has systematically fallen. It has done so even more in the past years. In particular, announcements related to asset purchases had a strong dampening impact on market uncertainty. This suggests that, despite the increasing complexity of unconventional policies, the ECB has been successful in communication.

Market uncertainty drops on ECB’s Governing Council Days
Figure 1: Market uncertainty drops on ECB’s Governing Council Days
Post n°97
Published on 01/09/2019

By the Eco Notepad editorial team

Eco Notepad celebrated its second anniversary in December 2018. This is an opportunity to look back on this rich period in which we published almost 100 blog posts analysing economic and monetary developments. The posts on inflation, monetary policy and financial stability attracted a great deal of interest from our readers, as did those on growth and global trade, the deindustrialisation of the French economy and the increase in the number of monopolies in the United States. Let’s take a closer look.

Post n°96
Published on 12/21/2018

The share of inheritance in aggregate wealth has varied significantly over time. Indeed, it depends on economic and demographic conditions that are not constant. The share was very high during the 19th century and until the First World War. After an abrupt decline, it is now rising in several countries.

Chart 1. Share of inherited wealth in Europe and the USA, 1900-2010
Chart 1. Share of inherited wealth in Europe and the USA, 1900-2010
Post n°95
Published on 12/19/2018

By Jean Dalbard, Hervé Le Bihan and Raphaël Vives

At its meeting of 13 December 2018, the ECB Governing Council confirmed that it would stop the net asset purchase programme begun in late 2014 at the end of this year. Quantitative easing nonetheless remains in place: it depends primarily on the stock of assets held by the Eurosystem rather than on the flow of purchases. This stock will remain unchanged for as long as the Eurosystem continues to reinvest the proceeds from maturing securities.

Chart 1: Eurosystem asset purchases and reinvestments since March 2015
Chart 1: Eurosystem asset purchases and reinvestments since March 2015 Source: BDF, ECB. Note: Flow of purchases under all the APP programmes, in EUR billions. The dotted line shows the notional purchase target set by the Governing Council. March 2015: start of the public sector purchase programme.
Post n°94
Published on 12/12/2018

By Clément Mazet-Sonilhac and Clément Malgouyres (with Juan Carluccio and Thierry Mayer)

The diffusion of information and communication technology (ICT) is considered to be a factor for economic growth, notably in developed countries. In particular, the diffusion of broadband internet could improve firms’ ability to find trading partners abroad as well as products suited to their needs. In France, the roll-out of broadband between 1998 and 2008 corresponds to a substantial improvement in firms’ imports.

Chart 1: A decade of gradual broadband roll-out
Chart 1: A decade of gradual broadband roll-out Source: Banque de France and authors’ calculations
Post n°93
Published on 11/20/2018

By Vincent Grossmann-Wirth and Benoît Hallinger

The Eurosystem’s non-standard monetary policy has led to a significant build-up of excess liquidity in the euro area banking system, concentrated among a few countries. Since 2015, this concentration can mainly be explained by the Eurosystem’s asset purchase programme (APP) and the geographical location of the accounts and settlement circuits used in its implementation.

Chart 1: High concentration of excess liquidity among a few countries
Chart 1: High concentration of excess liquidity among a few countries Sources: ECB, Banque de France
Post n°92
Published on 11/08/2018

By Silvia Gabrieli and Claire Labonne

Between 2011 and the announcement of Outright Monetary Transactions (OMTs), high rates of non-performing exposures to peripheral countries hindered banks’ access to the interbank market. Sizeable holdings of peripheral countries’ sovereign bonds also increased the price paid for interbank funding. The introduction of OMTs in 2012 and Targeted Longer-Term Refinancing Operations (TLTROs) in 2014 successfully curbed these channels of fragmentation risk.

Figure 1: Average interest rates in the euro area interbank market for GIIPS
Figure 1: Average interest rates in the euro area interbank market for GIIPS Source: Gabrieli and Labonne (2018)
Post n°91
Published on 10/18/2018

By Gilbert Cette and Ombeline Jullien de Pommerol

The diffusion of information and communication technology (ICT) and the associated benefits in terms of growth appear to have petered out at the start of the 2000s in advanced countries. This suggests we are experiencing a pause in the third industrial revolution, ahead of the incipient shock linked to the digital economy.

Chart 1 – Stabilisation of the nominal ICT capital coefficient since 2000
Chart 1 – Stabilisation of the nominal ICT capital coefficient since 2000 Source: authors' calculations using ICT investment data from the OECD.
Post n°90
Published on 10/11/2018

By Adrien Boileau and Olivier Gonzalez

The Economic Modernisation Act has reduced payment periods, by capping them, for the most part, at 60 days. Today, average payment times are stable, but late payments continue to weigh on the cash flow of businesses, which seem unwilling to pay their suppliers faster so as not to weaken their solvency. Yet reconciling these two goals is possible.

Chart 1: Sharp fall in days payable outstandings (DPOs) and days sales outstandings (DSOs) as a result of the Economic Modernisation Act
Chart 1: Sharp fall in days payable outstandings (DPOs) and days sales outstandings (DSOs) as a result of the Economic Modernisation Act Source: Banque de France –FIBEN database, data to October 2017.
Post n°89
Published on 10/09/2018

By Baptiste Meunier

Despite full employment, Japan is struggling with wage stagnation. Although this "enigma" can in part be explained by cyclical factors - subdued productivity and inflation expectations - it is also being exacerbated by structural factors linked to the country’s social model, notably the duality of its labour market. As a result, the prospects for a rise in wages and hence inflation remain limited.

Croissance des salaires et chômage au Japon
Chart1 – Wage growth and unemployment in Japan Source: OECD

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