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Civil war declaration: On April 14th and 15th, 2012 Federal Republic of Germany "_urkenstaats"s parliament, Deutscher Bundestag, received a antifiscal written civil war declaration by Federal Republic of Germany "Rechtsstaat"s electronic resistance for human rights even though the "Widerstandsfall" according to article 20 paragraph 4 of the constitution, the "Grundgesetz", had been already declared in the years 2001-03. more
ECONOMIC BULLETIN
9 January 2025
ECB publishes Economic Bulletin
This publication presents the economic and monetary information which forms the basis for the Governing Council’s policy decisions. It is released eight times a year, two weeks after each monetary policy meeting.
Read the new Economic Bulletin
PUBLICATION
8 January 2025
Closing the green investment gap
Delaying the green transition will come at a cost for people, businesses and governments alike. To ensure a smooth transition, we need to see a significant increase in green investment in Europe. Our occasional paper provides insights into investment needs and policy options.
Read the occasional paper
THE ECB BLOG
10 January 2025
Productivity of public vs. private R&D
Investments in research & development (R&D) typically foster productivity growth. But the funding source matters. The ECB Blog shows: publicly funded R&D complements private investments and has greater effects on productivity growth because of its larger spillovers.
Read The ECB Blog- 8 January 2025
- WEEKLY FINANCIAL STATEMENTEnglishOTHER LANGUAGES (22) +Annexes
- 8 January 2025
- WEEKLY FINANCIAL STATEMENT - COMMENTARY
- 7 January 2025
- MFI INTEREST RATE STATISTICS
- 7 January 2025
- PRESS RELEASE
- 2 January 2025
- MONETARY DEVELOPMENTS IN THE EURO AREAAnnexes
- 2 January 2025
- MONETARY DEVELOPMENTS IN THE EURO AREA
- 31 December 2024
- WEEKLY FINANCIAL STATEMENTEnglishOTHER LANGUAGES (22) +Annexes
- 31 December 2024
- WEEKLY FINANCIAL STATEMENT - COMMENTARY
- 3 January 2025
- Slides by Philip R. Lane, Member of the Executive Board of the ECB, at AFA panel on geopolitical fragmentation at 2025 ASSA annual meeting in San Francisco
- 18 December 2024
- Speech by Philip R. Lane, Member of the Executive Board of the ECB, MNI Webcast
- 16 December 2024
- Keynote speech by Isabel Schnabel, Member of the Executive Board of the ECB, at the CEPR Paris Symposium 2024 hosted by the Banque de FranceAnnexes
- 16 December 2024
- 16 December 2024
- Speech by Christine Lagarde, President of the ECB, at the Bank of Lithuania’s Annual Economics Conference on “Pillars of Resilience Amid Global Geopolitical Shifts”, on the occasion of the 10th anniversary of euro introduction, Vilnius, Lithuania
- 12 December 2024
- Christine Lagarde, President of the ECB, Luis de Guindos, Vice-President of the ECB, Frankfurt am Main, 12 December 2024EnglishOTHER LANGUAGES (23) +Related
- 12 December 2024
- 12 December 2024
- EnglishOTHER LANGUAGES (23) +
- 9 January 2025
- Interview with Piero Cipollone, conducted by Federico Fubini
- 20 December 2024
- Interview with Luis de Guindos, Vice-President of the ECB, conducted by Wouter van Bergen and Martin Visser
- 4 December 2024
- Contribution by Christine Lagarde, President of the ECB to The Economist
- 28 November 2024
- Interview with Christine Lagarde, President of the ECB, conducted by Roula Khalaf, Patrick Jenkins and Olaf Storbeck on 25 November 2024
- 27 November 2024
- Interview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Mark Schrörs and Alexander Weber on 25 November 2024
- 10 January 2025
- Investments in R&D typically foster productivity growth. But the funding source matters. The ECB Blog shows that publicly funded R&D complements private investments and has greater effects on productivity growth because of its larger spillovers.Details
- JEL Code
- O47 : Economic Development, Technological Change, and Growth→Economic Growth and Aggregate Productivity→Measurement of Economic Growth, Aggregate Productivity, Cross-Country Output Convergence
O30 : Economic Development, Technological Change, and Growth→Technological Change, Research and Development, Intellectual Property Rights→General
H50 : Public Economics→National Government Expenditures and Related Policies→General
- 8 January 2025
- The rise of working-from-home during the pandemic dramatically changed the way we organise work. And teleworking is transforming more than just our professional lives: The ECB Blog looks at how this shift is affecting the housing market and inequality.Details
- JEL Code
- R21 : Urban, Rural, Regional, Real Estate, and Transportation Economics→Household Analysis→Housing Demand
R31 : Urban, Rural, Regional, Real Estate, and Transportation Economics→Real Estate Markets, Spatial Production Analysis, and Firm Location→Housing Supply and Markets
J60 : Labor and Demographic Economics→Mobility, Unemployment, Vacancies, and Immigrant Workers→General
- 6 January 2025
- When returns on safe assets fall, investors move some of their money to riskier assets. This ECB Blog shows: US Treasuries are replaced by global bonds, while German Bunds substitutes are mostly from Europe. This effect is smaller in times of market stress.Details
- JEL Code
- G11 : Financial Economics→General Financial Markets→Portfolio Choice, Investment Decisions
G12 : Financial Economics→General Financial Markets→Asset Pricing, Trading Volume, Bond Interest Rates
G15 : Financial Economics→General Financial Markets→International Financial Markets
- 18 December 2024
- The growth of negotiated wages is expected to ease in 2025. This is the information emerging from the ECB wage tracker, which we will publish on a regular basis from now on. The ECB Blog explains the tool and how it can help monitor wage pressures in the euro area.
- 16 December 2024
- Though overall inflation has come down a lot, domestic inflation remains stubbornly high. This is typical for monetary policy tightening cycles. To understand why, The ECB Blog looks at how monetary policy is transmitted to wages, profits and productivity.Details
- JEL Code
- E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E42 : Macroeconomics and Monetary Economics→Money and Interest Rates→Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems
E47 : Macroeconomics and Monetary Economics→Money and Interest Rates→Forecasting and Simulation: Models and Applications
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
- 9 January 2025
- WORKING PAPER SERIES - No. 3011Details
- Abstract
- Climate-linked bonds, issued by governments and supranational organizations, are pivotal in advancing towards a net-zero economy. These bonds adjust their payoffs based on climate variables such as average temperature and greenhouse gas emissions, providing investors a hedge against long-term climate risks. They also signal government commitment to climate action and incentivize stronger policies. The price differential between climate-linked bonds and nominal bonds reflects market expectations of climate risks. This paper introduces a model of climate risk hedging and estimates that approximately three percent of government debt in major economies could be converted into climate-linked bonds.
- JEL Code
- E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
G12 : Financial Economics→General Financial Markets→Asset Pricing, Trading Volume, Bond Interest Rates
G13 : Financial Economics→General Financial Markets→Contingent Pricing, Futures Pricing
Q54 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics→Climate, Natural Disasters, Global Warming
- 9 January 2025
- WORKING PAPER SERIES - No. 3010Details
- Abstract
- Exploiting the recalibration of ECB’s outstanding central bank funding in 2022, we show that a sharp reabsorption of bank liquidity induces a tightening impact on credit supply, as intended when centralbanks reduce their balance sheets. The tightening originates from the sudden relative convenience for banks accustomed to large liquidity holdings to more rapidly adapt to the new environment. Moreover, we show that the associated reduction in credit supply has real economic effects.
- JEL Code
- E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
- 9 January 2025
- ECONOMIC BULLETIN
- 9 January 2025
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 8, 2024Details
- Abstract
- The recalibration of the third series of targeted longer-term refinancing operations (TLTRO III) in October 2022 led to an accelerated repayment schedule, bringing forward the fastest and largest ever decline in Eurosystem borrowing. This strengthened the transmission of policy rates to bank lending conditions. In just over two years, euro area banks repaid more than €2 trillion from TLTRO III. Banks adjusted their balance sheets to allow for the TLTRO repayments, using excess liquidity or raising additional funds via bonds and deposits. This reduction in liquidity and increased reliance on more expensive funding sources led banks to tighten their own lending conditions, thereby reinforcing the transmission of higher policy rates to bank lending.
- JEL Code
- E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G28. : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
- 9 January 2025
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 8, 2024Details
- Abstract
- This box describes Eurosystem liquidity conditions and monetary policy operations during the fifth and sixth reserve maintenance periods of 2024, running from 24 July to 22 October 2024.
- JEL Code
- E40 : Macroeconomics and Monetary Economics→Money and Interest Rates→General
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
- 9 January 2025
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 8, 2024Details
- Abstract
- This box analyses the heterogeneous pass-through of monetary policy to goods and services inflation. The granular analysis examines the 72 prices of goods and services that comprise the Harmonised Index of Consumer Prices excluding energy and food (HICPX). Using an empirical model, we classify HICPX prices according to their sensitivity to monetary policy shocks, which varies considerably across items. While sensitive items account for a larger share of non-energy industrial goods than of services, the price responses of sensitive services are similar to those of sensitive goods. The March 2023 peak in the HICPX was driven by both sensitive and non-sensitive items. Recent data show a marked decline in the contribution of sensitive items, with non-sensitive services driving around two-thirds of recent HICPX inflation developments.
- JEL Code
- E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
C32 : Mathematical and Quantitative Methods→Multiple or Simultaneous Equation Models, Multiple Variables→Time-Series Models, Dynamic Quantile Regressions, Dynamic Treatment Effect Models, Diffusion Processes
- 9 January 2025
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 8, 2024Details
- Abstract
- This box investigates empirically the short-run effects of the European Union Emissions Trading System (EU ETS) on European gross fixed capital formation and European greenfield foreign direct investment (FDI) in the period 2003-19. While the EU ETS lowers greenhouse gas emissions by reducing entitlement rights and pricing them competitively, it can result in short-term cost disadvantages compared with foreign competitors, jeopardising and/or diverting investment away from Europe, as it is similar to a tax levied on companies operating in Europe. The empirical analysis in this box focuses on the impact of carbon price shocks and documents a small short-term drop in investment, driven by carbon-intensive industries, and a temporary decrease in greenfield FDI in Europe. At the same time, empirical evidence on the long-term impact indicates that the ETS also provides incentives for firms to invest in reducing the carbon intensity of their production processes and adopting more efficient technologies, increasing European energy independence.
- JEL Code
- Q48 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy→Government Policy
Q58 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics→Government Policy
F21 : International Economics→International Factor Movements and International Business→International Investment, Long-Term Capital Movements
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
- 9 January 2025
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 8, 2024Details
- Abstract
- This box explores the resilience of US equity markets since 2023 in spite of monetary policy tightening and persistent geopolitical tensions. Market dynamics have been driven by strong earnings growth expectations linked to advances in artificial intelligence, particularly for the so-called Magnificent Seven stocks, and by buoyant risk appetite. Elevated valuations and the significant stock market concentration make the US equity market vulnerable to adverse shocks, such as disappointing earnings or macroeconomic surprises.
- JEL Code
- G12 : Financial Economics→General Financial Markets→Asset Pricing, Trading Volume, Bond Interest Rates
G15 : Financial Economics→General Financial Markets→International Financial Markets
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
- 9 January 2025
- ECONOMIC BULLETIN - ARTICLEEconomic Bulletin Issue 8, 2024Details
- Abstract
- This article explores how energy shocks influence capital and research and development expenditure in the EU and outlines possible implications for growth, productivity and competitiveness. The findings indicate that energy shocks can adversely affect corporate investment, potentially undermining future EU competitiveness, especially for financially constrained and energy-intensive firms. Policy measures at national and European level could help reduce energy prices and strengthen energy supply, making the EU less vulnerable to future energy shocks.
- JEL Code
- Q41 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy→Demand and Supply, Prices
Q43 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy→Energy and the Macroeconomy
O47 : Economic Development, Technological Change, and Growth→Economic Growth and Aggregate Productivity→Measurement of Economic Growth, Aggregate Productivity, Cross-Country Output Convergence
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
- 8 January 2025
- OCCASIONAL PAPER SERIES - No. 367Investing in Europe’s green future: green investment needs, outlook and obstacles to funding the gapDetails
- Abstract
- The green transition of the EU economy will require substantial investment to 2030 and beyond. Estimates of green investment needs vary between institutions and are surrounded by high uncertainty, but they all point to a requirement for faster and more ambitious action. Green investment will need to be financed primarily by the private sector. While banks are expected to make a key contribution to funding the green transition, capital markets need to deepen further, especially to support innovation financing. Progress on the capital markets union would support the green transition. Public funds will be vital to complement and de-risk private green investment. Structural reforms and enhanced business conditions should be tailored to encourage firms, households and investors to step up their green investment activities.
- JEL Code
- E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
Q41 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy→Demand and Supply, Prices
Q50 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics→General
Q58 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics→Government Policy
- 8 January 2025
- OCCASIONAL PAPER SERIES - No. 366Details
- Abstract
- Two phenomena are increasingly reshaping the world economy. One is the growing and well-documented importance of climate transition policies that differ across countries. The other is the stark rise of geoeconomic fragmentation (GEF) concerns. While differences in climate transition policies are not new, they could amplify GEF, which is a new, growing risk. Conceptually, GEF is a policy-driven reversal of global economic integration, guided by strategic considerations such as national security, sovereignty, autonomy, or economic rivalry. It does not include reversals to global economic integration that are driven by autonomous change, such as shifts in technology, demographics or preferences, or policies motivated primarily by prudential or environmental concerns and labour or human rights. GEF propagates via all the channels through which countries engage with each other economically and politically to provide global public goods such as climate change mitigation. The steep rise in trade and investment restrictions points to coming headwinds which could be compounded by uncoordinated climate transition policies. Conversely, GEF could make transition policies more difficult as, together with their prerequisites – such as shared regulatory approaches, knowledge sharing and financial aid to less well-off countries – they hinge on effective cross-border coordination and collaboration. There is a considerable risk that GEF may hinder climate transition policies. The report is structured as follows. The first section sheds light on how climate policies may contribute to GEF. The second section analyses the extent to which GEF could hinder the green transition. The last section discusses gaps and avenues for further analytical and model-based work.
- JEL Code
- F52 : International Economics→International Relations, National Security, and International Political Economy→National Security, Economic Nationalism
F64 : International Economics→Economic Impacts of Globalization→Environment
H87 : Public Economics→Miscellaneous Issues→International Fiscal Issues, International Public Goods
Q54 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics→Climate, Natural Disasters, Global Warming
- 8 January 2025
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 8, 2024Details
- Abstract
- After rising during the pandemic, the household saving rate in the euro area fell back to its pre-pandemic average by mid-2022. Since then, it has risen again noticeably, in the wake of recent severe economic shocks. Empirical evidence suggests that rising real incomes and high real interest rates, together with negative real wealth effects, have pushed up household savings over the last two years. With these factors likely to persist for some time, the saving rate is expected to remain high in the near term, although it is likely to settle below its current level.
- JEL Code
- D11 : Microeconomics→Household Behavior and Family Economics→Consumer Economics: Theory
D84 : Microeconomics→Information, Knowledge, and Uncertainty→Expectations, Speculations
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
- 8 January 2025
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 8, 2024Details
- Abstract
- High levels of economic uncertainty may push households and firms to postpone spending and investment decisions, which could dampen economic activity. Given that uncertainty is not directly observable, this box assesses recent signals from a number of uncertainty measures that are derived from statistical methods, surveys, financial data and textual analysis. There is currently a divergence between the relatively low uncertainty indicated by measures associated with the short-term economic situation and the still high – and rising – uncertainty reflected in measures related to longer-term policy issues. Analysis based on a simple empirical framework suggests that increasing uncertainty, especially about economic policies, dampens real GDP, consumption and particularly business investment.
- JEL Code
- D11 : Microeconomics→Household Behavior and Family Economics→Consumer Economics: Theory
D84 : Microeconomics→Information, Knowledge, and Uncertainty→Expectations, Speculations
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
- 7 January 2025
- WORKING PAPER SERIES - No. 3009Details
- Abstract
- Banks are reluctant to tap central bank backup liquidity facilities and use the borrowed funds for loans to the real economy. We show that excessively parsimonious borrowing and lending can arise in a stigma-free model where the banking sector has an incentive to overissue deposits. Banks don’t heed the central bank’s call for more credit to finance investment because they simply ignore the collective gains from stronger activity in their atomistic decisions. Central banks can address this market failure by disintermediating market-based finance. A lender-of-last-resort (LOLR) system in which the central bank offers liquidity liberally but on non-concessionary conditions improves over a pure laissez-faire arrangement, where asset liquidation in the marketplace is the only source of emergency liquidity. But under LOLR banks remain reluctant to intermediate. Credit easing (CE) and quantitative easing (QE), instead, can stimulate bank borrowing and repair the broken nexus between liquidity provision and credit. Empirical analysis using bank-level and loan-by-loan data supports our model predictions. We find no empirical connection between loans and borrowed reserves obtained from conventional refinancing facilities. In contrast, there is a robust connection between loans and structural sources of liquidity: reserves borrowed under a CE program or non-borrowed, i.e. acquired from a QE injection. We also find that firms with greater exposure to banks borrowing in a CE program or holding larger volumes of non-borrowed reserves increase employment, sales, and investment.
- JEL Code
- E5 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit
E43 : Macroeconomics and Monetary Economics→Money and Interest Rates→Interest Rates: Determination, Term Structure, and Effects
G2 : Financial Economics→Financial Institutions and Services
- 7 January 2025
- WORKING PAPER SERIES - No. 3008Details
- Abstract
- To what extent can private firms’ external equity substitute for debt financing in a banking crisis? To answer this question, I use firm-level data and firm-bank linkages to estimate the causal effect of an imported lending cut from a large German bank on firms’ capital structure and real outcomes. The estimates imply that for every 1 euro reduction in debt, private firms in Germany received 0.27 euros of external equity. Firm-owner linkages indicate that outsiders provided equity funds in 40% of the firms that received an equity injection, while existing owners provided the funds in the rest. These findings highlight the importance of multiple sources of financing that can serve as backup facilities when the primary source of intermediation fails. The results also have implications for Macro-Finance heterogeneous firm models that typically overlook the role of equity financing.
- JEL Code
- G01 : Financial Economics→General→Financial Crises
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
- 7 January 2025
- ECONOMIC BULLETIN - ARTICLEEconomic Bulletin Issue 8, 2024Details
- Abstract
- NextGenerationEU (NGEU) is the largest ever programme of the EU and aims to support its economic recovery after the pandemic crisis and to modernise economies, with a focus on digital and green transformation. This article provides an updated description of the implementation effort as well as an assessment by ECB staff on the impact on the euro area economy. Based on a variety of models and scenarios, it is estimated that the public expenditures and structural reforms linked to NGEU will have a positive impact on euro area output, while the impact on inflation is expected to be muted. The expected positive effect on potential output should help reduce government debt ratios, as projected for the main beneficiary euro area countries. Compared with the initial assessment by ECB staff from 2022, the macroeconomic impact of NGEU is expected to materialise later but to be of similar size. Delays in the implementation of NGEU-linked expenditures and reforms are the key factor behind this reprofiling. The cumulated estimate remains broadly unchanged in the presence of two opposite forces: first, an increase in the nominal RRF-related investment financing grants to euro area countries and second, the unanticipated inflation which eroded the real value of the funds.
- JEL Code
- C54 : Mathematical and Quantitative Methods→Econometric Modeling→Quantitative Policy Modeling
E02 : Macroeconomics and Monetary Economics→General→Institutions and the Macroeconomy
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
F45 : International Economics→Macroeconomic Aspects of International Trade and Finance
H87 : Public Economics→Miscellaneous Issues→International Fiscal Issues, International Public Goods
O52 : Economic Development, Technological Change, and Growth→Economywide Country Studies→Europe
- 6 January 2025
- ECONOMIC BULLETIN - ARTICLEEconomic Bulletin Issue 8, 2024Details
- Abstract
- In the aftermath of the COVID-19 pandemic, the euro area labour market showed remarkable resilience despite weak economic growth and various challenges, including supply chain disruptions, the energy crisis and geopolitical tensions. The relative strength of the labour market compared with economic activity led to a marked decline in measures of labour productivity. Factors such as reduced real wages, increased profit margins, lower average hours worked and strong labour force growth contributed to favourable labour market dynamics, encouraging firms to hire or retain workers. Looking ahead, there are signs of easing in the labour market as some of the factors sustaining employment subside, aligning labour market dynamics more closely with economic activity. Nevertheless, structural issues, such as declining average hours worked and labour force dynamics, may persist.
- JEL Code
- E24 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital
J2 : Labor and Demographic Economics→Demand and Supply of Labor
- 20 December 2024
- GOVERNING COUNCIL STATEMENT
- 19 December 2024
- STUDY ON THE PAYMENT ATTITUDES OF CONSUMERS IN THE EURO AREA (SPACE)Annexes
- 19 December 2024
- STUDY ON THE PAYMENT ATTITUDES OF CONSUMERS IN THE EURO AREA (SPACE)
- 19 December 2024
- STUDY ON THE PAYMENT ATTITUDES OF CONSUMERS IN THE EURO AREA (SPACE)
- 19 December 2024
- STUDY ON THE PAYMENT ATTITUDES OF CONSUMERS IN THE EURO AREA (SPACE)
- 19 December 2024
- STUDY ON THE PAYMENT ATTITUDES OF CONSUMERS IN THE EURO AREA (SPACE)
- 19 December 2024
- OCCASIONAL PAPER SERIES - No. 365Details
- Abstract
- In light of recent global economic and geopolitical shocks threatening trade openness, this report aims to shed light on geoeconomic fragmentation and develops a rich set of new tools to assess its economic effects and implications for central banks. The report shows that, although global trade integration has largely withstood recent disruptions and the rise of inward-looking policies, selective decoupling between few trading partners (United States vis-à-vis China, western economies vis-à-vis Russia) and for specific products (such as advanced technologies) is occurring. Survey data show that, although European firms are reorganising supply chains critical foreign dependencies persist. A firm-level stress test reveals that sudden disruptions in the supply of critical inputs from high-risk countries would lead to significant, albeit very heterogeneous, economic losses across firms, regions and sectors. Addressing foreign dependencies with broad-based protectionism policies, however, is self-defeating. In an extreme counterfactual scenario involving prohibitive and across-the-board trade barriers between geopolitical blocs, global GDP could decline by up to 9% coupled with an increase in global inflation of 4 percentage points in the first year, with the impact persisting for at least five years. It is conceivable that trade fragmentation will unravel over the course of a number of years, with supply disruptions becoming more frequent and severe than in the past. If this process should ultimately lead to a less interconnected global economy, countries might suffer from increased volatility and price pressures, as shocks cannot be easily diversified away through trade. [...]
- JEL Code
- F13 : International Economics→Trade→Trade Policy, International Trade Organizations
F14 : International Economics→Trade→Empirical Studies of Trade
F51 : International Economics→International Relations, National Security, and International Political Economy→International Conflicts, Negotiations, Sanctions
F52 : International Economics→International Relations, National Security, and International Political Economy→National Security, Economic Nationalism
F61 : International Economics→Economic Impacts of Globalization→Microeconomic Impacts
F62 : International Economics→Economic Impacts of Globalization→Macroeconomic Impacts
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E50 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→General
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