The US economy began showing signs of slowing in mid-2006, notably due to the downturn in home building. Because of the specific nature of this shock, its impact on the economies of Japan, the eurozone and the emerging countries stayed limited. Growth remained pretty strong, particularly in the eurozone, fuelled by very buoyant investment and exports. The slowdown in the second quarter of 2007 (in... Lire la suite
For the past several years, the eurozone current account has been nearly balanced despite divergent trends in the current accounts of individual member countries. Germany's current account has improved in the recent period, while the current-account deficits of Spain, Portugal, and Greece widened by 8.3, 9.8, and 8.1 points of GDP respectively in 2006.In theory, these current-account imbalances ar... Lire la suite
Protecting the environment is a major policy challenge for the coming decades. Whether the aim is to combat climate change, preserve biodiversity, or reduce water and air pollution, it is vital to start framing effective environmental policies today. These must achieve a high level of protection while minimising the costs of this effort to society.Governments can draw on a broad array of instrumen... Lire la suite
Under the Bretton Woods system, fixed parities vs. the dollar required that national monetary policies follow that of the United States. The demise of that system raised the question of the need for some other form of macroeconomic policy coordination.From a theoretical point of view, coordination amounts to tailoring each country's policies to match those recommended by an "all-knowing global pla... Lire la suite
The rise of the emerging countries has transformed the geography of global trade. The major developed countries, France included, are seeking to win market share in these countries. By comparison with its main European partners, France needs to focus its efforts on certain regions where it lacks presence, e.g. emerging Asia, the oil producing countries, and Eastern Europe.As far as market shares a... Lire la suite
There are several methods for dating past economic cycles, but it is harder to define where we are in the cycle in real time. The difficulty in detecting turning points sufficiently quickly can give rise to substantial forecasting errors, generally common to the entire forecasting community.The practice, in that case, consists in consulting business tendency surveys and, in the past ten years or s... Lire la suite
The link between exchange rates and interest rates is a recurring topic of discussion among economists and financial analysts, with particular emphasis on how a monetary policy shift affects the exchange rate.This article focus on the relationship referred to as uncovered interest-rate parity (UIP). UIP formalises the following principle: when two currencies' relative interest rates diverge substa... Lire la suite
Moving to a single currency has reduced trading costs, enhanced price transparency and increased financial stability. However, the euro area is sometimes subject to asymmetric shocks. In order to respond to these shocks, EMU Member States can rely on appropriate national policies, or other real dynamics adjustment mechanisms, such as real competitiveness adjustments or the mobility of production f... Lire la suite
To safeguard against credit risk and prevent a systemic crisis, banks must comply with prudential regulations requiring them to hold a certain amount of capital for each loan granted. The Basel II Capital Accord has reformed the procedures for calculating regulatory capital - which now increases with borrower risk - as part of efforts to strengthen the stability of the international banking system... Lire la suite
The balance of global growth has shifted since summer 2006 in geographical terms. The United States has been experiencing a soft landing since the middle of last year, under the influence of the housing market downturn, which will probably continue to act as a drag on the economy for much of 2007. Eurozone growth (year-on-year) overtook the United States at the end of 2006, indicating a decoupling... Lire la suite