INSERTED BY ANONYMOUS PROXY
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
12 November 2025
Inequality during the inflation surge
Although income, wealth and consumption inequality indicators stayed broadly stable during the 2021-23 inflation surge, lower-income households faced higher inflation. They were also more vulnerable to rising interest rates through greater reliance on adjustable-rate mortgages.
Read Article 1 of the Economic Bulletin
SPEECH
4 November 2025
Bulgaria on the euro area’s doorstep
On 1 January 2026 Bulgaria will adopt the euro. The change will happen in a single night, but it is the outcome of a meticulous preparation, says President Christine Lagarde. By joining the euro area, Bulgaria is reaffirming that it is proud, sovereign and European.
Read President Lagarde’s speech
EVENT
A milestone in European integration
Bulgaria is adopting the euro as of 1 January 2026, marking a significant step towards deeper European integration. Explore what this means for Bulgaria’s economy and how it will shape the country’s future within the euro area.
Find out more about Bulgaria and the euro- 11 November 2025
- WEEKLY FINANCIAL STATEMENTEnglishOTHER LANGUAGES (22) +Annexes
- 11 November 2025
- WEEKLY FINANCIAL STATEMENT - COMMENTARY
- 5 November 2025
- PRESS RELEASE
- 4 November 2025
- WEEKLY FINANCIAL STATEMENTEnglishOTHER LANGUAGES (22) +Annexes
- 4 November 2025
- WEEKLY FINANCIAL STATEMENT - COMMENTARY
- 31 October 2025
- GOVERNING COUNCIL DECISIONS - OTHER DECISIONSEnglishOTHER LANGUAGES (23) +
- 31 October 2025
- PRESS RELEASE
- 6 November 2025
- Slides by Philip R. Lane, Member of the Executive Board of the European Central Bank, at the 26th Jacques Polak Annual Research Conference organised by the International Monetary Fund in Washington D.C., USA
- 6 November 2025
- Speech by Isabel Schnabel, Member of the Executive Board of the ECB, at the ECB Conference on Money Markets 2025
- 4 November 2025
- Speech by Christine Lagarde, President of the ECB, at the high-level conference on “Bulgaria on the Doorstep of the Eurozone”, jointly organised by the Bulgarian Ministry of Finance and Българска народна банка (Bulgarian National Bank)
- 3 November 2025
- Slides by Philip R. Lane, Member of the Executive Board of the European Central Bank, at the Technological University in Dublin
- 30 October 2025
- Christine Lagarde, President of the ECB, Luis de Guindos, Vice-President of the ECB, Florence, 30 October 2025EnglishOTHER LANGUAGES (23) +Related
- 30 October 2025
- 11 November 2025
- Interview with Frank Elderson, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, conducted by Andrés Stumpf on 4 November 2025
- 10 November 2025
- Interview with Luis de Guindos, Vice-President of the ECB, conducted by Luís Reis Ribeiro
- 9 October 2025
- Interview with Piero Cipollone, conducted by Žanete Hāka-Rikarde and Priit Pokk on 29 September 2025
- 25 September 2025
- Interview with Piero Cipollone, Member of the Executive Board of the European Central Bank, conducted by Francesco Ninfole on 24 September 2025Related
- 26 September 2025
- 26 September 2025
- 17 September 2025
- Interview with Luis de Guindos, Vice-President of the ECB, conducted by Anja Ettel and Holger Zschäpitz
- 10 November 2025
- Banks consider the climate performance of firms and buildings in their lending policies. The euro area bank lending survey shows that lower climate risks tend to improve credit conditions. Meanwhile, green investments increase loan demand from firms and households.Details
- JEL Code
- E50 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→General
G20 : Financial Economics→Financial Institutions and Services→General
- 7 November 2025
- Climate risks affect credit ratings. And these, in turn, influence how banks can use securities as collateral to borrow money. This post takes a closer look at how the Eurosystem integrates climate change risks into its own collateral framework, through the credit risk channel.Details
- JEL Code
- E50 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→General
Q50 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics→General
- 4 November 2025
- Many Bulgarians are still hesitant about giving up the Lev on 1 January. Mixed feelings are not uncommon in countries adopting the euro. However, survey data show that support significantly increases once people start using the euro in their daily lives.Details
- JEL Code
- O52 : Economic Development, Technological Change, and Growth→Economywide Country Studies→Europe
Z18 : Other Special Topics→Cultural Economics, Economic Sociology, Economic Anthropology→Public Policy
- 20 October 2025
- The economist Robert Lucas famously wrote that “Once one starts to think about economic growth, it is hard to think about anything else.” The Nobel committee seems to agree. For the second year in a row, it has chosen to honour work on economic growth. This ECB Blog post looks at the research of this year’s laureates.Details
- JEL Code
- O10 : Economic Development, Technological Change, and Growth→Economic Development→General
- 17 October 2025
- Banks have bought back over €60 billion of their own shares since 2020, which is a sign of the industry’s confidence. However, share buybacks can also reduce the capital banks have available for potential crises. This blog post examines how euro area banks’ share prices reacted to these buybacks.Details
- JEL Code
- G10 : Financial Economics→General Financial Markets→General
G20 : Financial Economics→Financial Institutions and Services→General
- 12 November 2025
- LEGAL ACT
- 12 November 2025
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 7, 2025Details
- Abstract
- Evidence from the ECB Consumer Expectations Survey (CES) – based on a one-off set of questions introduced in the July 2025 wave – suggests that the majority of car purchases in July 2025 were of combustion engine vehicles, followed by hybrid and fully electric cars. Most purchases were of second-hand cars, reflecting concerns about the value of new cars depreciating quickly, particularly among high-income households, as well as limited access to affordable financing options, especially among low-income households. Most respondents in the July 2025 CES wave had no plans to buy a car within the next year, with economic and financial uncertainty and a preference for alternative modes of transportation playing a role, particularly for low-income households. While demand for hybrid cars is expected to increase, interest in fully electric vehicles remains limited. Elevated economic and financial uncertainty suggests that the recovery in car demand will remain gradual and uneven, with the adoption of electric vehicles continuing at a slow pace.
- JEL Code
- D12 : Microeconomics→Household Behavior and Family Economics→Consumer Economics: Empirical Analysis
L62 : Industrial Organization→Industry Studies: Manufacturing→Automobiles, Other Transportation Equipment
- 12 November 2025
- WORKING PAPER SERIES - No. 3151Details
- Abstract
- Is there an undesired side-effect of banking regulation on the non-bank sector? How effective is the non-bank transmission channel of monetary policy in the presence of macroprudential policy? Using a state-dependent local projection approach and a rich dataset capturing macroprudential tightening across euro area countries, we present strong cross-country heterogeneity. In financially conservative markets (Germany, France, the Netherlands), tight monetary policy combined with stricter macroprudential measures significantly contracts investment fund assets. Conversely, financial hubs (Luxembourg, Ireland, Italy) experience counterintuitive expansions under the same policy mix. We introduce a simple balance-sheet framework that shows how interacting funding-cost and collateral-constraint channels generate these opposing responses. Further disaggregation shows that equity funds are more vulnerable to joint tightening in conservative systems, while bond funds partly offset contractionary forces in hubs through higher yields.
- JEL Code
- 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
G51 : Financial Economics - Network
- Challenges for Monetary Policy Transmission in a Changing World Network (ChaMP)
- 12 November 2025
- WORKING PAPER SERIES - No. 3150Details
- Abstract
- We study how survey-based measures of funding needs and availability influence the transmission of euro area monetary policy to investment. We first provide evidence that funding needs are primarily driven by fundamentals, while perceived funding availability captures financial conditions. Using these two measures, we assess how the effectiveness of monetary policy varies with fundamentals and financial conditions. Our results indicate that monetary policy is most effective when firms’ fundamentals are strong. In contrast, firms with favorable financial conditions exhibit a more muted investment response to monetary policy. By combining these two survey-based measures, we construct an indicator of financial constraints and show that financially constrained firms are more sensitive to monetary policy. These findings offer new light on the transmission of monetary policy to corporate investment, emphasizing not only the role of financial conditions, but also the importance of fundamentals, which are beyond the direct influence of central banks
- JEL Code
- C83 : Mathematical and Quantitative Methods→Data Collection and Data Estimation Methodology, Computer Programs→Survey Methods, Sampling Methods
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy - Network
- Challenges for Monetary Policy Transmission in a Changing World Network (ChaMP)
- 12 November 2025
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 7, 2025Details
- Abstract
- Monetary policy affects household credit heterogeneously through multiple channels. On the supply side, monetary policy tightening is typically thought to have a more adverse effect on lower-income households. The ECB Consumer Expectations Survey supports this assumption, with lower-income households reporting tighter constraints on credit access and higher consumer loan rejection rates than households with higher incomes during the recent tightening period. That said, on the demand side, survey responses indicate that lower-income households did not reduce their mortgage loan applications, unlike higher-income households, and in fact even increased their consumer loan applications, during this tightening phase. As a result of these offsetting effects, lower-income households, unlike higher-income ones, did not report a decline in overall loan take-up at a time when borrowing conditions were less favourable. Households in lower-income brackets also increased their share of adjustable-rate mortgage loans during this period.
- JEL Code
- E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
G51 : Financial Economics
- 12 November 2025
- ECONOMIC BULLETIN - ARTICLEEconomic Bulletin Issue 7, 2025Details
- Abstract
- This article uses data from the Consumer Expectations Survey to examine the inflation episode of 2021-23, the mortgage rate responses and the perceived and actual effects of these developments on inequality. Public perceptions of inequality rose sharply during the inflation surge, with 73% of households reporting an increase. Cost-of-living pressures were cited as the main driver. By contrast, standard measures of income, wealth and consumption inequality calculated using data from the survey remained broadly stable in the euro area between 2022 and 2025. To better understand this divergence, personal inflation rates are constructed from consumption data to identify which income groups faced the greatest challenges in maintaining their living standards. Differences in financial decisions in response to higher interest rates, particularly the timing of loan applications and mortgage fixation periods, are also considered. Together, these mechanisms help to explain why inequality was perceived to have risen even though standard measures remained stable.
- JEL Code
- D31 : Microeconomics→Distribution→Personal Income, Wealth, and Their Distributions
E21 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Consumption, Saving, Wealth
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
G51 : Financial Economics
- 11 November 2025
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 7, 2025Details
- Abstract
- Oil prices have declined in recent months owing to a persistent oversupply in the market. A key driver has been a shift in the stance of OPEC+. The group has been increasing oil supply at a rapid pace despite already low prices, marking a clear departure from its historical role as a market stabiliser. A similar shift in behaviour occurred in 2014, when oil prices declined sharply and remained persistently low. This box evaluates the risk of a similar scenario unfolding today. While the current environment shows signs of continued OPEC-driven downward pressure on oil markets, the conditions that led to the dramatic price collapse in 2014 – in particular, robust non-OPEC supply growth – are not fully present today.
- JEL Code
- E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
Q43 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy→Energy and the Macroeconomy
Q47 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy→Energy Forecasting
- 11 November 2025
- WORKING PAPER SERIES - No. 3149Details
- Abstract
- Banks can grant loans to firms bilaterally or in syndicates. We study this choice by combining bilateral loan data with syndicated loan data. We show that loan size alone does not adequately explain syndication. Instead, banks’ ability to manage risks and firm riskiness drive the choice to syndicate. Banks are more likely to syndicate loans if their risk-bearing capacity is low and if screening and monitoring come at a high cost. Syndicated loans are more expensive and more sensitive to loan risk than bilateral loans. Our findings contradict the hypothesis that reputable borrowers graduate to the syndicated loan market.
- JEL Code
- E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
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
E63 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Comparative or Joint Analysis of Fiscal and Monetary Policy, Stabilization, Treasury Policy
F45 : International Economics→Macroeconomic Aspects of International Trade and Finance
G20 : Financial Economics→Financial Institutions and Services→General
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
- 11 November 2025
- WORKING PAPER SERIES - No. 3148Details
- Abstract
- Monetary aggregates provide valuable information about the monetary policy transmission and the business cycle. This paper applies machine learning methods, namely Learning Vector Quantisation (LVQ) and its distinction-sensitive extension (DSLVQ), to identify turning points in euro area M1 and M3. We benchmark performance against the Bry–Boschan algorithm and standard classifiers. Our results show that LVQ detects M1 turning points with only a three-month delay, halving the six-month confirmation lag of Bry–Boschan dating. DSLVQ delivers comparable accuracy while offering interpretability: it assigns weights to the sources of broad money growth, showing that lending to households and firms, as well as Eurosystem asset purchases when present, are the main drivers of turning points in M3. The findings are robust across parameter choices, bootstrap designs, alternative performance metrics, and comparator models. These results demonstrate that machine learning can yield more timely and interpretable signals from monetary aggregates. For policymakers, this approach enhances the information set available for assessing near-term economic dynamics and understanding the transmission of monetary policy.
- JEL Code
- E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers
C63 : Mathematical and Quantitative Methods→Mathematical Methods, Programming Models, Mathematical and Simulation Modeling→Computational Techniques, Simulation Modeling
- 11 November 2025
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 7, 2025Details
- Abstract
- Debate over China’s growing trade surplus has resurfaced amid US-China trade tensions, geoeconomic shifts and global imbalances. This box shows that the surplus reflects two distinct dynamics: persistently weak imports and surging exports. On the import side, structural policies promoting domestic substitution, trade restrictions and sluggish demand have curbed demand for foreign goods. On the export side, subdued domestic demand has led firms to redirect excess production capacity abroad, consistent with the “vent-for-surplus” mechanism. Sectoral evidence shows that this channel outweighs tariff-related trade diversion.
- JEL Code
- F13 : International Economics→Trade→Trade Policy, International Trade Organizations
F14 : International Economics→Trade→Empirical Studies of Trade
O53 : Economic Development, Technological Change, and Growth→Economywide Country Studies→Asia including Middle East
- 10 November 2025
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 7, 2025Details
- Abstract
- In the latest round of the European Commission’s biannual Standard Eurobarometer survey, a record 83% of euro area respondents expressed support for the euro – the highest level since the introduction of the single currency. Using the survey microdata, we show that this rise is broad-based across countries and sociodemographic groups, and that cross-country differences have narrowed significantly. Respondents who reported experiencing more of the benefits of the euro – such as easier price comparisons, business, travel or banking – are more likely to view the euro as “a good thing” for the EU. Our findings suggest that euro area citizens have now fully embraced the euro. Sustaining this high level of support will depend on ensuring that the euro continues to deliver tangible benefits and remains fit for a world shaped by digital and geopolitical transformation.
- JEL Code
- E42 : Macroeconomics and Monetary Economics→Money and Interest Rates→Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
F36 : International Economics→International Finance→Financial Aspects of Economic Integration
- 10 November 2025
- WORKING PAPER SERIES - No. 3147Details
- Abstract
- Collateral reuse in repo markets helps entities meet short-term funding needs, maintain market efficiency, and anchor collateral valuations, although it creates risks through interconnectedness. A prominent view in the literature is that securities dealers use their market position to obtain temporary free-cash wedges from differences in collateral requirements when reusing collateral, so-called “liquidity windfalls”. By affecting dealers’ funding structures, such windfalls could influence yield curve determination, leverage, and monetary policy transmission. Yet the evidence has been largely theoretical, with limited empirical work. Using a novel, confidential regulatory dataset on European Securities Financing Transactions, this study helps fill that gap. We find that about 11.6% of European repo transaction volume relies on reused securities, averaging more than 49 billion euros per day. Moreover, contrary to the liquidity windfalls hypothesis, dealers do not seem to systematically obtain extra liquidity through collateral reuse in repos.
- JEL Code
- G15 : Financial Economics→General Financial Markets→International Financial Markets
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G23 : Financial Economics→Financial Institutions and Services→Non-bank Financial Institutions, Financial Instruments, Institutional Investors
- 10 November 2025
- WORKING PAPER SERIES - No. 3146Details
- Abstract
- We study heterogeneity in households’ credit across nine European countries (Belgium, Spain, Hungary, Ireland, Italy, Latvia, Lithuania, Portugal, and Slovakia) during 2022-2024 using granular credit register data. We first document substantial between- and within-country variation in mortgage and consumer lending by borrower age, loan maturity, and interest rate fixation. We then quantify the passthrough of the ECB’s recent tightening cycle to household borrowing costs, and assess its heterogeneous impact across households. Pass-through is nearly complete for mortgages (around 0.9) but considerably weaker for consumer credit (around 0.4). While mortgage pass-through is relatively homogeneous across countries, consumer credit shows pronounced cross-country differences that cannot be explained by borrower or loan characteristics. Younger households face stronger mortgage pass-through but weaker consumer credit pass-through relative to older borrowers, and longer maturities are associated with stronger pass-through in both credit markets.
- JEL Code
- 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
D14 : Microeconomics→Household Behavior and Family Economics→Household Saving; Personal Finance - Network
- Challenges for Monetary Policy Transmission in a Changing World Network (ChaMP)
- 10 November 2025
- RESEARCH BULLETIN - No. 136Details
- Abstract
- Banks trade off short-term losses on deposits against long-term profits from cross-selling other products to new depositors. This strategy is especially attractive when policy rates are low and future sales are more valuable. Therefore, deposit rates move less than policy rates: banks keep them relatively higher when policy rates fall, and relatively lower when policy rates rise. As returns on other financial assets follow policy rates more closely, this makes deposits relatively less attractive for depositors at higher policy rates. Therefore, policy rate hikes lead to a reduction in deposits, which are the key source of refinancing for bank loans. This cuts loan supply, supporting the transmission of monetary policy.
- JEL Code
- D14 : Microeconomics→Household Behavior and Family Economics→Household Saving; Personal Finance
D43 : Microeconomics→Market Structure and Pricing→Oligopoly and Other Forms of Market Imperfection
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
G51 : Financial Economics
- 7 November 2025
- LETTERS TO MEPS
- 7 November 2025
- OCCASIONAL PAPER SERIES - No. 378Details
- Abstract
- In this paper we explore the role of the temporary and country-specific Additional Credit Claims (ACC) frameworks as a monetary policy implementation tool. We discuss their evolution and provide a novel and detailed description of all ACC measures adopted by the different euro area NCBs since 2012. Reviewing the literature, we document the channels through which ACCs contributed to liquidity distribution during the euro area sovereign debt crisis, the negative interest rate period and the pandemic. Drawing on panel data on the use of collateral and securities holding statistics, we document novel stylised facts about ACC mobilisation patterns during these episodes. A number of conceptual contributions and empirical findings emerge. While ACCs started out as a crisis instrument, the historical review highlights that ACCs constitute a policy tool that is suitable for enhancing monetary policy implementation. Empirically we find that pledging ACCs was not systematically associated with more concentrated collateral pools. Banks pledging ACCs were mostly universal banks and diversified lenders of varying size and were associated with higher funding costs for their short-term secured debt instruments, though the causality is unclear. Finally, drawing on the implementation and risk management experience with ACC frameworks as well as our empirical findings, we establish five lessons to inform future policy discussions on collateral
- JEL Code
- E4 : Macroeconomics and Monetary Economics→Money and Interest Rates
E5 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit
E65 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Studies of Particular Policy Episodes
- 7 November 2025
- LEGAL ACT
- 6 November 2025
- WORKING PAPER SERIES - No. 3145Details
- Abstract
- This paper studies the effect of alternative monetary policy responses and the implementation of different fiscal policy measures to an inflationary shock in a monetary union, through the lens of a global DSGE model calibrated to the euro area. We find that a more aggressive monetary policy response mitigates the inflation surge, but has a detrimental impact on economic activity that imposes a stronger increase of public debt, reducing the fiscal policy space. We also find that some fiscal policy measures may alleviate the negative impact of the shock on households and firms, but do not significantly alter the inflation dynamics: a reduction of consumption taxes reduces inflation only temporarily, while an increase of transfers or of public investment slightly increase inflation initially, even if the latter may have a protracted negative impact. Overall, an appropriate mix of monetary and fiscal policies may be needed to ensure a swift return of inflation to target, while mitigating the impact on consumption. Targeting transfers to support constrained households has a mild impact on inflation, but may be a way to mitigate the impact on the most vulnerable with a less detrimental effect on public debt.
- JEL Code
- E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
E63 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Comparative or Joint Analysis of Fiscal and Monetary Policy, Stabilization, Treasury Policy
F45 : International Economics→Macroeconomic Aspects of International Trade and Finance
- 6 November 2025
- OCCASIONAL PAPER SERIES - No. 377Details
- Abstract
- This paper serves as a reference guide on the effects of “standard” monetary policy shocks on output and prices, based on harmonised simulation exercises conducted across models of the European System of Central Banks (ESCB), meta-analysis of existing empirical literature for the euro area, and selected works on heterogeneity and non-linearities in the monetary transmission mechanism as captured by empirical models. Our analysis starts by comparing the effects of monetary policy shocks as estimated by structural, semi-structural and dynamic stochastic general equilibrium (DSGE) models, and identifying the main sources of heterogeneity – most notably via the specification of monetary policy rules, the slope of the Phillips curve, the role of real rigidities and financial frictions, and the expectations formation mechanism. While DSGE models tend to produce sharper responses, semi-structural models often reveal more gradual and persistent effects, in line with backward-looking empirical models. The second chapter presents a meta-analysis of estimated effects based on the empirical literature, which are broadly consistent with the results obtained from the ESCB models, although differences might appear when correcting for publication bias, or accounting for different identification frameworks. The study is then complemented by selected works on heterogeneity and non-linearities in the monetary transmission mechanism as captured by empirical models. Our analysis in the final chapter shows that monetary policy transmission is heterogeneous across countries, sectors, demand components, and time. It also reveals important non-linear and state-dependent dynamics: in high-inflation periods, greater price and wage flexibility amplifies the response of inflation while dampening output effects, thereby lowering the sacrifice ratio. [...]
- JEL Code
- C22 : Mathematical and Quantitative Methods→Single Equation Models, Single Variables→Time-Series Models, Dynamic Quantile Regressions, Dynamic Treatment Effect Models &bull Diffusion Processes
C52 : Mathematical and Quantitative Methods→Econometric Modeling→Model Evaluation, Validation, and Selection
D58 : Microeconomics→General Equilibrium and Disequilibrium→Computable and Other Applied General Equilibrium Models
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
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
F45 : International Economics→Macroeconomic Aspects of International Trade and Finance
- 5 November 2025
- WORKING PAPER SERIES - No. 3144Details
- Abstract
- Motivated by current events, this paper assesses the impact of tariff increases on bilateral greenfield foreign direct investment (FDI) over the period 2016-2023. Leveraging a comprehensive dataset of announced greenfield investment projects, official FDI statistics, and bilateral product-level tariff data, we estimate a series of gravity equations to uncover key relationships. Our results show that, at an aggregate level, tariff increases are associated with a rise in greenfield FDI, consistent with the tariff-jumping hypothesis. However, this positive effect reverses for greenfield manufacturing FDI, where high-intensity tariff increases significantly deter investment. A sectoral analysis reveals substantial heterogeneity: consumer-facing industries tend to attract more investment following tariff hikes, while input-intensive sectors experience declines. Overall, our findings suggest that using tariffs to stimulate foreign manufacturing investment is a risky strategy.
- JEL Code
- F13 : International Economics→Trade→Trade Policy, International Trade Organizations
F21 : International Economics→International Factor Movements and International Business→International Investment, Long-Term Capital Movements
F23 : International Economics→International Factor Movements and International Business→Multinational Firms, International Business
F68 : International Economics→Economic Impacts of Globalization→Policy
Interest rates
| Deposit facility | 2,00 % |
| Main refinancing operations (fixed rate) | 2,15 % |
| Marginal lending facility | 2,40 % |
Financial stability
Our tasks Institutional framework Financial Stability Review Macroprudential policy measuresMarket operations
Open market operations Asset purchase programmes Lendings of holdings under PSPPNOT AN EXPERT? CHECK OUT OUR EXPLAINERS
LEARN MORE
What is the European Central Bank?