Model-based regulation: lending in times of Covid
When the coronavirus (COVID-19) pandemic struck, it was vital for many firms to retain access to funding from banks. In order to calculate their capital requirements, banks measure borrowers’ credit...
View ArticleThe safe asset potential of EU-issued bonds
A safe asset is of high credit quality, retains its value in bad times and is traded in liquid markets. We show that bonds issued by the European Union (EU) are widely considered to be of high credit...
View ArticleRecent changes in consumers’ medium-term inflation expectations – a detailed...
In this article we exploit the richness and flexible design of the CES to explore in detail recent changes in consumers’ medium-term inflation expectations. The data suggest that over the course of...
View ArticleUnderstanding the impact of COVID-19 supply disruptions on exporters in...
We assess the impact of the pandemic and the ensuing disruptions to global value chains (GVCs) on exporting firms. We find that firms’ participation in GVCs increased their vulnerability to the...
View ArticleOne product, two prices: the border effect in retail prices
(Why) do prices and inflation rates differ within the euro area? We study the relevance of a national border for grocery prices in the otherwise homogenous and highly integrated border region between...
View ArticleA new tool in the box: dividend restrictions as supervisory policy stimulus
At the onset of the outbreak of the coronavirus (COVID-19) pandemic, central banks and supervisors introduced dividend restrictions as a new policy instrument aimed at supporting lending to the real...
View ArticleNavigating liquidity crises in non-banks: An assessment of central bank...
Are central bank tools effective in reaching non-banks with no access to the lender of last resort facilities? Using runs on mutual funds in March 2020 as a laboratory, we show that, following the...
View ArticleCarbon trade-offs: how firms respond to emission controls
Regulation to control carbon emissions challenges firms to develop optimal carbon management policies. We set out a unified approach to study the trade-offs carbon pricing poses for firms and how they...
View ArticleBonds at a premium: the impact of insurers on corporate bond issuers
On the basis of insurance companies’ bond investments, I examine how shifts in investors’ demand for corporate bonds affect non-financial bond issuers. When demand for their bonds increases, firms’...
View ArticleThe outlook is mixed: the asymmetric effects of weather shocks on inflation
Climate change has implications for price stability and the work of central banks. It may increase the volatility and heterogeneity of inflation, and hotter summers may lead to more frequent and...
View ArticleForecasting euro area inflation with machine-learning models
Inflation forecasts and their risks are key for monetary policy decisions. The strategy review concluded in 2021 highlighted how most Eurosystem models used to forecast inflation are linear. Linear...
View ArticleReports of AI ending human labour may be greatly exaggerated
Recent advances in artificial intelligence have been met with anxiety about the future of jobs. This article examines the link between AI-enabled technologies and employment shares across 16 European...
View ArticleHawkish or dovish central bankers: do different flocks matter for fiscal...
This column presents evidence on the role that US monetary policy plays in how fiscal spending affects the economy. A dovish Federal Open Market Committee (FOMC) delays policy rate increases, while a...
View ArticleQuantifying financial stability risks for monetary policy
When inflationary pressures started intensifying in 2022, the world’s major central banks faced a dilemma. They could rapidly tighten monetary policy at the risk of fuelling financial distress after...
View ArticleThe unequal impact of the 2021-22 inflation surge on euro area households
The 2021-22 surprise inflation surge had a major impact on households in the euro area. It reduced the real incomes and net wealth of most households as there was no immediate increase in nominal wages...
View ArticleShocked to the core: a new model to understand euro area inflation
The pandemic's disruption of global supply chains and the spike in natural gas prices following Russia’s invasion of Ukraine were significant drivers of surging inflation. Traditional inflation models...
View ArticleRecent changes in consumers’ medium-term inflation expectations – a detailed...
In this article we exploit the richness and flexible design of the CES to explore in detail recent changes in consumers’ medium-term inflation expectations. The data suggest that over the course of...
View ArticleUnderstanding the impact of COVID-19 supply disruptions on exporters in...
We assess the impact of the pandemic and the ensuing disruptions to global value chains (GVCs) on exporting firms. We find that firms’ participation in GVCs increased their vulnerability to the...
View ArticleOne product, two prices: the border effect in retail prices
(Why) do prices and inflation rates differ within the euro area? We study the relevance of a national border for grocery prices in the otherwise homogenous and highly integrated border region between...
View ArticleA new tool in the box: dividend restrictions as supervisory policy stimulus
At the onset of the outbreak of the coronavirus (COVID-19) pandemic, central banks and supervisors introduced dividend restrictions as a new policy instrument aimed at supporting lending to the real...
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