For countries experiencing a balance of payments crisis or running an excessive current account deficit, devaluing the nominal exchange rate can offer a quick return to competitiveness. However, this option is not available to countries belonging to a monetary union or with a fixed exchange rate regime in place (i.e. that have pegged their currency to a reference currency) without jeopardising sai... Lire la suite
Since the sovereign debt crisis in the euro area intensified in the summer of 2011, the growth paths of the United States and the euro area-which were closely linked beforehand, even during the crisis-have been diverging. In 2012, U.S. growth held firm at 2.2%, whereas the euro area slipped into a new recession, with GDP growth in negative territory at – 0.6%. This divergence is mainly due to the... Lire la suite
The shadow banking system (SBS) is made up of a multitude of banking and financial operators linked to each other by financial intermediation chains of varying lengths and degrees of complexity.At one end of the financial intermediation chain, deposits are taken from non-financial investors, in the form of shares in money market mutual funds, for example. At the other end of the chain, loans are d... Lire la suite
At the end of 2012, international trade and global economic growth stalled, partly because of temporary factors. The main reason growth remained flat in the United States was the fall in military spending and the impact that hurricane Sandy had on output and inventories, which cancelled out the growth of private expenditure. The dip in the United Kingdom's fourth-quarter growth offset the stronger... Lire la suite
Economic activity in the major European Union countries and the United States has been heavily affected on several occasions since 2008 by the decline in confidence among economic players. Uncertainty in the financial markets, measured by market volatility indexes or government-bond spreads, rose sharply in the summers of 2011 and 2012.In cyclical turnarounds, short-term economic growth is often h... Lire la suite
Since 2005, the German economy has created 2.5 million jobs, mostly part-time positions or work on fixed-term or temporary (agency) contracts. This job growth has reduced the unemployment rate by 5 points to the historic low of 5.3% according to the International Labour Office (ILO) definition of unemployment.Germany's structural labour market reforms in the early 2000s are frequently cited as one... Lire la suite
Asia has been by far the most dynamic region of the world over the past decade, powered most notably by China's rapid growth, to the point where it now accounts for more than two-thirds of world growth.In most Asian countries, income levels are progressively converging with those of the advanced economies, and these countries are developing their physical and financial infrastructure. Considerable... Lire la suite
International trade finance facilitates more than 80% of flows of trade in merchandise, and is central to the smooth functioning of world trade at a time when manufacturing processes are fragmented across many different countries.In 2009, trade volumes declined for the first time since 1982, as a result of the economic and financial crisis. One of the explanations advanced to account for this cont... Lire la suite
Large-scale use of short-time working (Kurzarbeit) is frequently advanced as an explanation of German jobs miracle («Jobwunder») during the crisis of 2008-2009. Germany succeeded in holding unemployment to 7.5%, a rise of just 0.2% between 2008 and 2009, whereas in France it rose by 1.6 points to 9.4% in 2009. This system concerned nearly 1.5 million salaried workers in Germany in 2009, as against... Lire la suite
Oil prices have been rising since June of this year, after falling in the second quarter of 2012 against a background of slowing economic activity and increased supply. The price of Brent has risen 50% since 2007, to $115 per barrel in October 2012.The steep increase in the price of oil in 2008, and again in 2010-2011, has sparked discussion on how the importing countries' monetary authorities mig... Lire la suite