Pas disponible en français
Christophe Madaschi
- 8 August 2017
- OCCASIONAL PAPER SERIES - No. 195Details
- Abstract
- This paper looks at how the profitability of banks in Sweden and Denmark has evolved in the context of negative interest rates. Overall, it finds that profitability has continued to improve, even with negative monetary policy rates. Data and modelbased evidence confirm that the monetary policy transmission to bank lending rates has so far not been impaired, though they point to a downward stickiness in the bank deposit rate. Swedish and Danish banks rely mainly on wholesale funding to finance their activities, and the fall in wholesale funding costs has led to a significant decline in interest expenses, thereby bolstering the resilience of the net interest income margin. All in all, this has created the prerequisites for positive credit supply developments, and possible unintended consequences of negative monetary policy rates, such as a reduction in credit supply, have not materialised. However, according to Sveriges Riksbank and Danmarks Nationalbank, the prevailing low level of interest rates has aggravated financial stability risks stemming from the large exposure of the banking sector to the housing market in both economies, in a context of rapidly rising housing prices and the resultant growing indebtedness of the household sector.
- JEL Code
- E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
- 19 December 2005
- OCCASIONAL PAPER SERIES - No. 41Details
- Abstract
- This paper analyses trends in working time in the euro area, in comparison with the US, over the period 1970 to 2004 and examines the causes and consequences of the observed changes. Between 1970 and 2004, a downward trend in average annual hours worked per worker can be observed for the euro area as a whole, all individual euro area countries and the United States. In contrast to the US, the euro area and a number of euro area countries also experienced a significant decline in annual hours worked per capita ("labour utilisation") over the last three decades. Data reveal important disparities across countries - both in trends and levels. While some countries managed to reverse their downward trends in labour utilisation in the 1980s and 1990s, the level of average hours worked per capita in 2004 remained significantly below their 1970 levels for all euro area countries for which data are available. From a policy perspective, falling annual average hours worked per worker or per capita are not a problem per se, if they reflect preferences. For example, increasing shares of voluntary part-time employment across many euro area countries, whilst increasing European employment rates, have contributed to the downward trend in average annual hours per worker. However, to the extent that low working hours are due to institutional features which create disincentives to work, such as high tax wedges and high unemployment benefits, or enforced reductions in working hours, these factors should be addressed.
- JEL Code
- J3 : Labor and Demographic Economics→Wages, Compensation, and Labor Costs
J22 : Labor and Demographic Economics→Demand and Supply of Labor→Time Allocation and Labor Supply
J24 : Labor and Demographic Economics→Demand and Supply of Labor→Human Capital, Skills, Occupational Choice, Labor Productivity
E24 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital
D02 : Microeconomics→General→Institutions: Design, Formation, and Operations
- 28 October 2005
- OCCASIONAL PAPER SERIES - No. 39Details
- Abstract
- This paper analyses the differences in hourly labour productivity growth rates and levels between the Nordic EU countries (Denmark, Finland and Sweden) and four larger euro area countries (Germany, France, Italy and Spain). Additional information for the euro area as a whole, the UK and the US is also provided. Given that the economic and social models developed in the Nordic EU countries are in many ways closer to those of the larger euro area countries than that of the US, the experience of these countries is particularly interesting. Since the mid-1990s, the Nordic EU countries, particularly Sweden and Finland, have experienced stronger labour productivity growth than the larger euro countries. Like in the US, innovation and technological changes have played a major role in explaining the higher labour productivity growth in the Nordic EU countries compared with the larger euro area economies. Information and Communication Technology (ICT) diffusion is a key element to explain these differences. A number of institutional indicators, relating to market regulation, human capital, R&D nvestments and venture capital, show that the Nordic EU economies are better positioned than some of the larger euro area countries to exploit the opportunities provided by ICT in terms of productivity growth. However, remaining labour market rigidities may not allow the Nordic EU countries to fully enjoy the benefits of ICT diffusion in terms of increased employment.
- 31 July 2004
- OCCASIONAL PAPER SERIES - No. 19Details
- Abstract
- This paper analyses trends in sectoral specialisation in the EU and concludes the following: 1) The European production structure appears more homogenous than that of the US. 2) While sectoral specialisation has shown a slight increase in some smaller euro area countries towards the end-1990s, it is too early to detect any potential impact of EMU. 3) Despite some changes in sectoral composition, the business cycles of euro area countries became more synchronised over the 1990s, which may be seen as reassuring from the point of view of the single monetary policy. 4) Sectoral re-allocation accounts for as much as 50% of the increase in labour productivity growth in business sector services in the euro area. 5) The slowdown of European labour productivity growth relative to the US since the mid-1990s is explained by a stronger performance in the US wholesale and retail trade, financial intermediation and high-tech manufacturing sectors.
- JEL Code
- E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
E23 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Production
E24 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital