The major Central Banks have cut their key rates sharply in recent months in response to the rapid slowdown in the economy. These conventional monetary policies have shown their limitations, however. In the first place, central banks have little room for manoeuvre: target rates are now between 0 and 0.25% for the Fed, 1.25% for the ECB, and 0.5% for the Bank of England (BoE). Second, despite previ... Lire la suite
In the fall of 2008, the financial crisis expanded, leading to a sharp contraction of activity by year's end. In countries where growth was largely debt-based, and whose populations are very sensitive to the wealth effect (US, UK and Spain), a steep fall in financial asset prices and tougher financing conditions resulted in a sharp drop in domestic demand. For export-oriented countries (such as Ge... Lire la suite
According to French Customs, some 100,000 French firms export goods, or nearly one firm in 20, This propensity to export is well below that of Germany, close to that observed in Italy, and greater than the figure for the United Kingdom and Spain.A very small number of firms account for the bulk of these exports, with the top thousand exporters representing 70% of total export revenues. While indep... Lire la suite
The price of agricultural commodities rose sharply between 2007 and mid-2008. The downstream impact of this increase on food prices paid by consumers depends on relations between suppliers and supermarket chains, and on their relative bargaining power. In theory, this is determined primarily by the respective degrees of concentration among suppliers and supermarket chains, together with other fact... Lire la suite
One of the earliest signs of the financial crisis in summer 2007 was the plunge in the indices compiled from credit default swaps (CDSs) on a basket of subprime-backed bonds. Recently, the worsening situation in the emerging countries has been perceptible in the steep rise of CDS spreads on their sovereign bonds.Credit default swaps protect investors against credit events on reference corporate or... Lire la suite
Competition in the markets for goods and services is frequently cited as a contributor to economic growth. That is because greater competition in a given sector is thought to boost activity and jobs by lowering the sale price of goods and raising that sector's productivity, particularly through innovation.From a theoretical standpoint, however, the impact of competition on productivity is less cer... Lire la suite
In so-called knowledge-based economies, both research and development (R&D) and innovation are essential to growth and competitiveness. In this respect, France does not appear to be investing enough in R&D activity. With R&D spending at 2.1% of GDP, France ranks in the middle of the league table, above the European average but well below Germany, the Scandinavian countries, the United States and J... Lire la suite
The emergence of new economic giants like India and China combined with very rapid growth in trade have profoundly altered the supply of factors of production on a global level. The supply of labour weighted by the share of exports in global GDP has more than doubled since 1980, as has the stock of capital.Despite efforts to raise educational standards, low skilled workers continue to dominate glo... Lire la suite
France's départements spent an average of €913.4 per inhabitant in 2006, with social services amounting to a total of €27 billion accounting for nearly 50% of this spending.Two periods can be distinguished within the general trend of social services expenditure between 1992 and 2006, namely a period of stability, from 1992 to 1999, during which there was no change in scope of the départements' pow... Lire la suite
In the summer of 2008, even before suffering the consequences of the abrupt worsening of the financial crisis in mid-September, the world economy was faltering.By the summer of 2007, growth around the world had already started to slow down. This was due to the impact of the depressed American housing market on world financial markets starting in August 2007, and to the rise in commodity price – oi... Lire la suite