The ECB is still worried about the weakness of inflation

By Christophe Blot, Jérôme Creel and Paul Hubert

The President of the European Central Bank, Mario Draghi, recently announced that the increase in the ECB’s key interest rate would come “well past” the end of the massive purchases of bonds (scheduled for September 2018), mainly issued by the euro zone countries, and at a “measured pace”. The increase in the key rate could therefore occur in mid-2019, a few weeks before the transfer of power between Mario Draghi and his successor. Continue reading “The ECB is still worried about the weakness of inflation”

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Missing deflation – unique to America?

By Paul Hubert, Mathilde Le Moigne

Was the way inflation unfolded after the 2007-2009 crisis atypical? According to Paul Krugman: “If inflation [note: in the United States] had responded to the Great Recession and aftermath in the same way it did in previous big slumps, we would be deep in deflation by now; we aren’t.” Indeed, after 2009, inflation in the United States remained surprisingly stable given actual economic developments. Has this phenomenon, which has been described as “missing deflation”, been observed in the euro zone? Continue reading “Missing deflation – unique to America?”

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How can Europe be saved? How can the paradigm be changed?

By Xavier Ragot

There are new inflections in the debate over the construction of Europe. New options from a variety of economic and political perspectives have seen the light of day in several key conferences and workshops, though without the visibility of public statements. The debate is livelier in Germany than in France. This is due probably to the caricature of a debate that took place during France’s presidential elections, which took the form of “for or against the single currency”, while the debate needed was over how to orient the euro area’s institutions to serve growth and deal with inequalities. Continue reading “How can Europe be saved? How can the paradigm be changed?”

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The minimum wage: from labour costs to living standards. Comparing France, Germany and the UK

By Odile Chagny, IRES, Sabine Le BayonCatherine Mathieu, Henri Sterdyniak, OFCE

Most developed countries now have a minimum wage, including 22 of the 28 EU countries. France has long stood out for its relatively high minimum wage, the SMIC. But in 1999, the United Kingdom introduced a minimum wage, and the British government’s goal is to raise this level to 60% of the median wage by 2020, which would bring it to the level of France’s SMIC and among the highest-ranking countries in the OECD. More recently, in 2015, Germany also introduced a minimum wage. Continue reading “The minimum wage: from labour costs to living standards. Comparing France, Germany and the UK”

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The dilemmas of immaterial capitalism

By Sarah Guillou

A review of: Jonathan Haskel and Stian Westlake, Capitalism Without Capital. The Rise of the Intangible Economy, Princeton University Press, 2017, 288 pp.

This book is at the crossroads of the debate about the nature of current and future growth. The increasing role of intangible assets is indeed at the heart of questions about productivity gains, the jobs of tomorrow, rising inequality, corporate taxation and the source of future incomes. Continue reading “The dilemmas of immaterial capitalism”

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The 2018 European economy: A hymn to reform

By Jérôme Creel

The OFCE has just published the 2018 European Economy [in French]. The book provides an assessment of the European Union (EU) following a period of sharp political tension but in an improving economic climate that should be conducive to reform, before the process of the UK’s separation from the EU takes place. Continue reading “The 2018 European economy: A hymn to reform”

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France’s growth in 2018-2019: What the forecasters say …

By Sabine Le Bayon and Christine Rifflart

Following the INSEE’s publication of the first version of the accounts for the fourth quarter of 2017 and a first estimate of annual growth, we have been considering the outlook for 2018 and 2019 based on a comparative analysis of forecasts made for France by 18 public and private institutes, including the OFCE, between September and December 2017. This post presents the highlights of this analysis, which are given in detail in OFCE Policy Brief No. 32 of 8 February 2018 entitled, “A comparison of macroeconomic forecasts for France” and the associated working paper (No. 06-2018) (which contains the tables of the institutes’ forecasts). Continue reading “France’s growth in 2018-2019: What the forecasters say …”

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Which new path for raising labour productivity?

By Bruno Ducoudré and Eric Heyer

The industrialized countries are experiencing what seems to be a persistent slowdown in the growth of labour productivity since the second oil shock. This has been the subject of a great deal of analysis in the economic literature[1] that considers the possible disappearance of the growth potential of the developed economies, and consequently their inability to return to a level of activity in line with their pre-crisis trajectories. In other words, could the industrialized countries have entered a phase of “secular stagnation”, making it more difficult to reduce public and private debt? The exhaustion of gains in productivity would also modify any diagnosis made of their conjunctural situation, particularly as regards their labour markets. Continue reading “Which new path for raising labour productivity?”

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No love lost for Chinese investors!

By Sarah Guillou

In his speech of 15 January 2017, France’s Minister of Economy and Finance, Bruno Le Maire, speaks of “plundering investments”, suspecting Chinese investors of wanting to “loot” French technology. Continue reading “No love lost for Chinese investors!”

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High-frequency trading and regulatory policies. A tale of market stability vs. market resilience

by Sandrine Jacob Leal and Mauro Napoletano

Over the past decades, high-frequency trading (HFT) has sharply increased in US and European markets. HFT represents a major challenge for regulatory authorities, partly because it encompasses a wide array of trading strategies (AFM (2010); SEC, 2010), and partly because of the big uncertainty yet surrounding the net benefits it has for financial markets (Lattemann and al. (2012); ESMA (2014); Aguilar, 2015). Continue reading “High-frequency trading and regulatory policies. A tale of market stability vs. market resilience”

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