Occasional Papers

The Occasional Papers series seeks to disseminate the work carried out by the Banco de España within its sphere of competence that is considered to be of general interest for knowledge of the functioning of the Spanish economy and of its international environment.

The opinions and analyses published in the Occasional Papers are the responsibility of the authors and are not necessarily shared by the Banco de España or the Eurosystem.

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  • 29/04/2022
    2208. El crecimiento potencial de la economía española tras la pandemia (497 KB) Pilar Cuadrado, Mario Izquierdo, José Manuel Montero, Enrique Moral-Benito and Javier Quintana

    Despite the exogenous nature of the COVID-19 health crisis, its intensity and persistence could have a negative impact on long-term economic growth. This article offers a comprehensive discussion of the various channels through which this crisis could affect the potential growth of economies, as well as some scenarios for the Spanish economy over a medium-term horizon. Although the high degree of uncertainty in the current circumstances makes it advisable to interpret these estimates with caution, the results point to a potential growth rate for the Spanish economy very similar to that estimated before the pandemic, of around 1.3%. However, it should be noted that the economic policies adopted have been and will be critical in determining the long-term effects on the economy’s growth capacity. In particular, European funds can be catalysts for a significant boost to both investment and productivity in the long term. Such a boost would result in higher potential growth of the Spanish economy, especially if accompanied by structural reforms that favour synergies between public and private investment, maximising their impact on productivity. According to the estimates presented in this article, the potential growth of the Spanish economy could be in the vicinity of 2% under a scenario in which a good selection of investment projects financed with European funds is accompanied by growth-enhancing structural reforms.

  • 23/03/2022
    2206. Dinámicas de población durante el COVID-19 (1 MB) Eduardo Gutiérrez, Enrique Moral-Benito and Roberto Ramos

    The year 2020 was marked by net migration dynamics in Spain that resulted in an increase in the rural population at the expense of the urban population, interrupting the secular trend towards greater urbanisation prevailing since the middle of the last century. According to the findings of this paper, the demographic momentum of rural areas was attributable both to higher population inflows from elsewhere in the country and, in particular, to a slowdown in outflows from rural areas. In addition, a regression analysis shows that the demographic dynamics during the rural exodus (1950-1990), the percentage of second homes and accessibility to services, both physical and digital, are explanatory factors when characterising municipal-level population changes during the pandemic. 2020 represents a unique period, marked by strict restrictions on movement and on activity, along with stringent social distancing measures. This setting, along with the modest levels of remote working, raise significant doubts and uncertainty as to the extent to which the slowdown in urbanisation observed in that year will continue over a longer time horizon.

  • 16/03/2022
    2205. Household indebtedness according to the Spanish Survey of Household Finances and the Central Credit Register: a comparative analysis (661 KB) Olympia Bover, Laura Crespo and Sandra García-Uribe

    The aim of this study is to analyse the quality of the information on indebtedness gathered by the Spanish Survey of Household Finances (“EFF” by its Spanish initials). To this end, we match EFF data with the administrative data from the Central Credit Register (“CIR” by its Spanish initials), which every month details all outstanding loans in excess of €6,000 arranged by individuals with financial institutions in Spain. Given the differences between the two sources in terms of the information they gather, we construct and compare various measurements of household indebtedness. In order to minimise the differences associated with the discrepancies in household composition according to the municipal population register and the EFF, we analyse both the total linked sample and a subset of comparable households. Our findings show that, after controlling for the limitations of the link, indebtedness calculated with the EFF and the CIR is similar. 25.8% of households have mortgage debt according to the EFF, versus 29.9% according to the CIR. Within indebted households, the median mortgage debt recorded in the EFF is only 0.5% lower than the figure according to the CIR. Non-mortgage debt differences are bigger, but not substantial. 18% of households have non-mortgage debt according to the EFF, versus 23% according to the CIR, and the median debt is 10% lower in the EFF. Moreover, the detailed information provided by the survey on the characteristics of households and their respective debts makes it possible to identify the age of the reference person and the existence of debts shared with individuals who are not members of the household as being the characteristics that have the most bearing on the discrepancies between the EFF and the CIR. The findings of this analysis will help improve the gathering of information and the protocols for interviewing households for the EFF.

  • 07/03/2022
    2204. Analysis of ESG disclosures in Pillar 3 reports. A text mining approach (863 KB) Ángel Iván Moreno Bernal and Teresa Caminero García

    Disclosure of prudential information on environmental, social and governance (ESG) risks will become mandatory from June, 2022 for large institutions with securities traded on a regulated market of any Member State. This paper tries to assess how prepared European financial institutions are for this requirement and applies text mining techniques to analyse the prudential reports, commonly referred to as Pillar 3 reports, for 2019 and 2020 of most of the significant banks under the ECB direct supervision in order to evaluate the level of awareness of these institutions in relation to the materiality of ESG risks. By applying a simple taxonomy of terms based on lexicons and regular expressions using a tool that we have developed, we are able to identify relevant excerpts with a high level of precision searching for different combinations of concepts within the taxonomy of terms. The results indicate that although there is an increased awareness of the ESG risks, with a significant increase in smaller institutions (those with less tan 30 billion in assets), the level of detail included is generally low and the introduction of the new ESG mandatory disclosures should have a significant impact on the level of disclosures in this area.

  • 02/03/2022
    2203. Designing a price index for the Spanish commercial real estate market (1 MB) Matías Lamas and Sara Romaniega

    This paper proposes a price index for the Spanish commercial real estate (CRE) market and its main segments. No official price indices currently exist for these assets and non-official statistics are thin on the ground and offer limited coverage. The estimated index fills this statistical gap, providing for enhanced monitoring of CRE market developments. The price indicator draws on the methodology used to calculate the Spanish National Statistics Institute’s housing market price indices, but factoring in certain elements specific to the CRE sector. Various alternative indices are also considered, although the indicator proposed is that which strikes the best balance between the different statistical properties analysed here.

  • 17/03/2022
    2202. Analysis of labor flows and consumption in Spain during COVID-19 (1 MB) Piluca Alvargonzález, Marina Gómez, Carmen Martínez-Carrascal, Myroslav Pidkuyko and Ernesto Villanueva

    This article analyzes the link between household consumption and its determinants during the pandemic in Spain. For this purpose, both quantitative and qualitative data on consumption included in the Consumer Survey Expectations (CES) carried out by the European Central Bank are used. First, we construct a consumption index on the basis of its qualitative data on spending trends during the pandemic, and its heterogeneity across population groups points towards both unsatisfied consumption (due to existing restrictions on consumption) and the deterioration in the labor market being drivers of the decline of consumption during the pandemic. Likewise, the results show that, in line with the less stringent measures in place to control the pandemic, the strong negative link between income levels and consumption developments (linked to forced savings) has moderated in 2021 (with data up to August) with respect to the previous year. Then, we estimate what proportion of the recovery in household expenditure during the third quarter of 2020, after the large decline observed in the first semester, can be explained by the observed changes in the distribution of hours worked. First, we combine information on hours, industry, gender and age in the Spanish Labor Force Survey and consumption in the Spanish Survey on Household Finances (EFF) to estimate the potential change in expenditure associated with the change of hours worked for different population groups (age, gender, and education level). Those estimations also inform about the groups of the population whose expenditure has been most affected by the pandemic (low-schooling and individuals below 55 years of age). In a second step, we then compare potential and actual changes in consumption observed in the ECB's Consumer Expectation Survey to gauge quantitative contribution of changes in hours to the evolution of expenditure vs other factors (such as postponed expenditure). We find that changes in hours worked can explain almost half of consumption recovery in the 3rd quarter of 2020.
    Expected consumption trends are also analyzed. Results based on the analysis of qualitative data on expected consumption developments in the CES database indicate that in 2020 consumption perspectives were similar for households with different income levels, even if higher income families accumulated larger forced savings during this period. During 2021, once the phase of larger uncertainty about the economic and sanitary situation was overcome, higher income households also showed better consumption prospects. This suggests that savings accumulated during the pandemic may add greater momentum to the pick-up in consumption once the uncertainty about the epidemiological and economic situation abates. Likewise, individuals that have suffered a recent decline in hours worked (and, particularly, those that have run into unemployment) seem to be also more pessimistic about their labor situation perspectives, affecting their consumption expectations. This suggests that that the consolidation of the recovery of the labor market observed recently is likely to have a key role in explaining future consumption developments.

  • 28/01/2022
    2201. New allocation of Special Drawing Rights (874 KB) Manuel A. Pérez Álvarez

    In August 2021, the International Monetary Fund (IMF) made a new allocation of Special Drawing Rights (SDRs) equivalent to $650 billion. This significant amount has tripled the total existing stock of SDRs. For Spain it involves an increase of 16% in foreign reserves, and an increase in receivables from the IMF, which amount to 22% of the reserves on the balance sheet of the Banco de España, as compared with 10% at present.
    The purpose of this expansion of SDRs is to support a group of countries that are having most difficulty fighting the impact of the COVID-19 pandemic. These countries have a greater need for foreign exchange to obtain basic supplies just when they are shut out of international capital markets. The new allocation is likely to boost SDR transactions given its large amount, the urgent need for funds in some countries and the experience of the 2009 allocation.
    This paper explains the characteristics of the use of SDRs as an effective source of liquidity, concluding that the way in which the issuance of this instrument is made effective is by means of transactions, allocation being the formal prerequisite for their existence. Accordingly, the key to their effectiveness will be the transactions actually carried out to obtain liquidity in international business. A liquidity ratio is proposed for monitoring their use. With regard to the magnitude of the allocation and, given that it is based on the quotas of each IMF member country, the developed countries have received the bulk of the allocation, as opposed to those countries having greater difficulty accessing the markets. Accordingly, measures will have to be taken to promote the passing on of SDRs so that their purpose can be achieved and they effectively supplement the reserves available within the framework of international trade.

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