Publications

Economy of the European Union

From this page you can access thematically grouped Analytical Articles published in the Economic Bulletin from 1999, ordered by date of dissemination within each year.

All documents are available in PDF format PDF File. Opens in a new window

  • 05/12/2018
    The increase in TARGET balances in the euro area since 2015 (673 KB) Pana Alves, Antonio Millaruelo and Ana del Río

    The TARGET2 platform, which is owned by the Eurosystem, processes payments in euro
    with reserves, i.e. central bank money. The cross-border payment transactions channelled
    through this platform give rise to central bank claims and liabilities which, when aggregated
    and netted, produce the so-called TARGET balances. Since 2015, when various extraordinary
    monetary stimulus measures were introduced by the ECB, there has been a marked
    increase in aggregate TARGET balances, to levels above those reached during the sovereign
    debt crisis which took place in the first few years of the current decade. Unlike then, the
    recent developments do not reflect financial stress or general funding problems in euro area
    economies, as during the sovereign debt crisis, but are instead mainly linked to the
    execution of the Eurosystem’s asset purchase programme (APP).

  • 09/10/2018
    Wage moderation in Spain and in the euro area (636 KB) Pilar Cuadrado and Federico Tagliati

    One of the most visible characteristics of the recent economic recovery is the moderation of wage growth in a good number of advanced economies. This article analyses quantitatively the contribution of several factors to changes in the wage growth rate in Spain and in the euro area during the current upturn. In both cases, the results show that the recent wage moderation is attributable to relatively high levels of labour market slack and low inflation expectations. For the euro area, another significant factor is low productivity growth, in contrast to other similar phases of the economic cycle. The analysis also reveals that, in the most recent period, it is important to take into account broader slack indicators than the unemployment rate, given that the high proportion of involuntary part-time and discouraged workers are exerting some downward pressure on wages.

  • 04/10/2018
    Recent movements in the euro exchange rate and the impact on inflation in the Spanish economy (461 KB) Danilo Leiva, Jaime Martínez-Martín and Eva Ortega

    The effect of the euro exchange rate on inflation has taken on significant importance recently, with the application of the ECB’s expansionary monetary policy measures having coincided with episodes of euro appreciation, such as that observed between the second half of 2017 and early 2018, which tend to exert downward pressure on imported prices. This article analyses the factors behind the fluctuations in the euro exchange rate against the dollar during the recent period, and finds that this appreciation may have largely been due to the higher relative growth of the euro area, compatible with a pick-up in expected euro area inflation. However, the subsequent depreciation, since February 2018, might reflect factors related to changes in the relative confidence of financial markets to the detriment of the euro, and to the lower relative growth of the euro area compared with the United States. Further, it is documented how the pass-through of exchange rate movements to overall consumer-price inflation in the Spanish economy has increased slightly in recent years, owing mainly to the energy component, while core inflation remains much less sensitive to exchange rate changes.

  • 05/07/2018
    Recourse to Eurosystem funding by Spanish banks (683 KB) Ricardo Gimeno and Ana del Río

    During the crisis, euro area banks’ recourse to Eurosystem funding facilities was closely related to the severe tensions in the funding markets. However, since the latter part of 2014, Eurosystem refinancing operations have been essentially determined by the implementation of the single monetary policy and the need to reinforce the monetary stimulus by means of non-standard measures. The Spanish banking system currently has a relatively high level of recourse to Eurosystem funding, as a proportion of GDP and in terms of its weight in the banking sector balance sheet, although its share of total Eurosystem funding has fallen since 2014. The long maturities of this funding and the favourable conditions in the financial markets in the more recent period have afforded banks more scope to refinance or repay these debts in an orderly manner.

  • 17/05/2018
    An analysis of the trade exposure of Spanish firms to the United Kingdom (749 KB) Eduardo Gutiérrez Chacón and César Martín Machuca

    The trade exposure of Spanish firms to the United Kingdom is significant, albeit lower than that to the main euro area countries. In 2017 the growth in Spanish firms’ goods exports to the UK market that dated back to 2012 came to an end, against a background of sterling depreciation against the euro. The potential vulnerability of Spanish firms with a presence in the UK market to Brexit is somewhat limited by their distinctive characteristics; these companies are on average larger, more productive and more geographically diversified than those that export to the main euro area countries. In any event, the ultimate impact of this process on Spanish firms with a presence in the United Kingdom or with the potential to gain access to this market will largely depend on the terms eventually established for trade relations between the United Kingdom and the European Union.

  • 28/02/2018
    Euro area inflation expectations (2 MB) Ricardo Gimeno and Eva Ortega

    This study explores the recent dynamics of inflation expectations for the main euro area countries. It uses daily financial data for the main euro area countries over the past 15 years with a wide range of time horizons. The estimation of a model of the term structure of inflation expectations using these data allows the common part to be separated from the countryspecific part. It is found that, for the various time horizons and countries, the bulk of expected inflation is common to the whole euro area. The weight of country-specific factors is low, being most significant for the shorter term. For time horizons between five and ten years, the estimated inflation expectations showed a downward trend from 2012, which has reversed in the last two years owing to the application of a broad set of unconventional monetary policy measures in the euro area since mid-2014. Still, in the past year, medium-term inflation expectations have held below 2%, around 1.7% on average, clearly lower than in the period before the economic crisis.

  • 11/01/2018
    Labour market participation rate in the euro area: performance and outlook, a long-term view (678 KB) Cristina Fernández and David Martínez Turégano

    This article analyses the trajectory and the main explanatory factors of changes in the labour market participation rate in the euro area in recent decades. First, these changes are compared with the United States, highlighting the extraordinary convergence that has taken place between the two areas owing to the momentum in the European labour market and the declining secular trend on the other side of the Atlantic. Second, the increase in participation in the euro area was led by females, particularly as a result of the higher probability of new cohorts joining the labour market against a background of significant socio-educational changes. In any event, in view of the demographic ageing in progress and the progressive exhaustion of the above-mentioned changes, the focus is on the need for specific policies aiming to raise labour participation of such population groups where there is still room to do so, i.e. older workers, in general, and women in countries where the gender gap is still large.

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