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On the Same Theme

United States, beyond the "Trump" effect 4/21/2017
The economic outlook looks good in the US, but it has little to do with a "Trump" effect.
“Trump effect” or oil story? 4/21/2017
In the US, the rise in oil prices has something to do with the pick-up in investment.The so-called “Trump effect” is fading.
Cautious optimism 4/21/2017
The economic situation in the eurozone continues to improve. Stripping out volatile items reveals weak or non-existent inflationary pressures. We continue to expect monetary policy to remain accommodating.
How vulnerable are housing markets to a rise in interest rates? 4/20/2017
With interest rates still close to historical lows and increasing signs of a pickup in global inflation, a key question for global financial stability is how vulnerable residential real estate markets are to a rise in interest rates. In assessing vulnerability, a natural place to start is to look at valuation ratios. This note examines the ratio of residential house prices to household disposable incomes over a 40-year period for a set of 21 countries. The analysis suggests that valuation ratios for residential real estate are currently high in a number of countries but interestingly this is not the case for the largest economies in the sample, namely the United States, Japan and Germany. The sample contains 47 booms in residential house prices. The median boom lasts 5.5 years and is associated with an increase in the ratio of house prices to household disposable incomes of 45%. Countries currently in a housing boom include Canada, Australia, New Zealand and Luxembourg. The sample contains 36 housing busts. The median bust lasts 6 years and is associated with a decrease in the price-to-income ratio of 34.4%.  Countries currently in a housing downturn include Japan, Italy and Spain. In addition to valuation ratios, high leverage may pose a source of risk. However it turns out that household indebtedness has fallen significantly in most advanced economies over the last five years. Finally there are important variations in financing patterns across countries and over time. Within the euro zone the share of fixed-rate mortgages in new financing has increased significantly in a number of countries over recent years. These contracts lock in borrowing costs although higher long-term mortgage rates may still weigh on housing valuations and thus create negative wealth effects for all homeowners.  Borrowers with adjustable-rate contracts are in principle more exposed to a rise in borrowing costs. However short-term interest rates are not currently expected to move up significantly in the near term in the euro zone.
United States: Where are the canaries? Early warning indicators of financial stress 4/19/2017
Financial stress indicators are used as the proverbial canary in the coalmine: they help to assess whether Fed tightening is causing financial stress, in which case it may end up tipping the economy in a recession. The chart shows two indicators: the spread over US treasuries of US BBB corporate bonds and the financial stress indicator of the Federal Reserve Bank of St Louis (a composite of 18 series). Using these indicators to forecast major growth slowdowns or recessions is tricky: in the 2001 recession the composite indicator hardly moved whereas the peak of the corporate bond spread only occurred towards the end of 2002 although the economy was already recovering by then. In the 2008 recession, both indicators shot through the roof. Giving the volatility of the series, it seems that by the time the signal from the stress indicators is sufficiently clear, the onset of a recession is imminent. When the canary stops singing, drop everything and run for the exit.
Wait and see 4/14/2017
Inflation is still too low in the eurozone. This is what matters most for the ECB.
Monetary Policy: What decisions? 4/12/2017
As for objectives, the available instruments can differ from one central bank to the other, and more crucially from one point in the cycle to the other.
Monetary Policy: What decisions? 4/12/2017
As for objectives, the available instruments can differ from one central bank to the other, and more crucially from one point in the cycle to the other.
Monetary Policy: What decisions? 4/12/2017
As for objectives, the available instruments can differ from one central bank to the other, and more crucially from one point in the cycle to the other.
Monetary Policy: What decisions? 4/12/2017
As for objectives, the available instruments can differ from one central bank to the other, and more crucially from one point in the cycle to the other.

ABOUT US Three teams of economists (OECD countries research, emerging economies and country risk, banking economics) make up BNP Paribas Economic Research Department.
This website presents their analyses.
The website contains 1480 articles and 368 videos