News and highlights

16th Research Workshop Banco de España-CEMFI

16th Research Workshop Banco de España-CEMFI.

Click here for more information.

Banco de España-CEMFI-UIMP Conference on the Spanish Economy

Banco de España, together with CEMFI and Menéndez Pelayo International University (UIMP) launches the fourth academic conference on the Spanish economy, that will be held on 3 and 4 July 2025 in Santander.

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Researchers in Economics and Finance

Applications for researchers in Economics and Finance are open! Deadline: November 17th.

More information here.

15th Research Workshop Banco de España-CEMFI

15th Research Workshop Banco de España-CEMFI. More information here.

Research Feature - June 2024

Staggered Contracts and Unemployment During Recessions.

Effrosyni Adamopoulou, Luis Díez-Catalán and Ernesto Villanueva

Abstract. This paper studies the impact of downward wage rigidity on wage and employment dynamics after the outbreak of major recessions in Spain. Downward wage rigidity stems from collective agreements, which set province-sector-skill-specific minimum wage floors for all workers. By exploiting variation in the renewal of collective agreements, we find that those signed before the onset of recessions settle on higher nominal negotiated wage growth than agreements signed afterwards. Leveraging social security data and the distribution of the worker-level bite of minimum wage floors, we document that the negotiated wage rigidity translated into higher wage growth mainly among workers with near-floor wages. Consequently, these workers experienced a substantial and highly persistent increase in the probability of non-employment, but only if they were covered by long-duration collective agreements. Our findings highlight the interplay between rigidity at different parts of the wage distribution and labor market institutions and identify conditions under which collective contract staggering and the inability to renegotiate may amplify aggregate shocks. Click here.

Isabel Micó wins the Enrique Fuentes Quintana prize for her doctoral thesis

Banco de España research economist Isabel Micó was awarded the Enrique Fuentes Quintana prize for her doctoral thesis. The Enrique Fuentes Quintana Awards aim to recognize excellent and rigorous doctoral work. 

In her thesis, she studies the impact of taxation or ownership structure on household financial decisions as well as the role of economic expectations in shaping household consumption.

Banco de España congratulates Isabel for being awarded the prize and looks forward to see more of her fantastic work in the future. 

Research Feature - May 2024

Climate Transition Risk and the Role of Bank Capital Requirements.

Salomón García-Villegas and Enric Martorell.

Abstract. How should bank capital requirements be set to deal with climate-related transition risks? We build a general equilibrium macro banking model where production requires fossil and low-carbon energy intermediate inputs, and the banking sector is subject to volatility risk linked to changes in energy prices. Introducing carbon taxes to reduce carbon emissions in fossil energy induces risk spillovers into the banking sector. Sectoral capital requirements can effectively address risks from energy-related exposures, benefiting household welfare and indirectly facilitating capital reallocation. Absent carbon taxes, implementing fossil penalizing capital requirements does not reduce emissions significantly and may threaten financial stability. During the transition, capital requirements can complement carbon tax policies, safeguarding financial stability and trading off long-run welfare gains at the expense of lower investment and credit supply in the short run. Click here.

Call for papers: joint CEPR and Banco de España Tenth Economic History Seminar

The seminar is an event organized by the Centre for Economic Policy Research (CEPR) and the Banco de España. The Economic History Seminar aims to bring together leading researchers in the field of economic history, and to foster interaction between junior and senior researchers across academia and policy institutions.

Contributions are invited on topics including, but not necessarily limited to: Macroeconomic and financial history; Economic growth in the very long run; Institutions and economic development; History of the international economy.

Call for papers: here.
Submission Deadline: Sunday, May 19, 2024.

Research Feature - April 2024

Inequality and the Zero Lower Bound.

Jesús Fernández-Villaverde, Joël Marbet, Galo Nuño y Omar Rachedi

Abstract. We study how household inequality shapes the effects of the nominal interest rate zero lower bound (ZLB) on aggregate dynamics. To do so, we consider a heterogeneous agent New Keynesian (HANK) model with an occasionally binding ZLB and solve the model non-linearly using a novel neural network algorithm. In this setting, changes in the monetary policy stance influence households’ precautionary saving by altering the frequency of ZLB events. As a result, the model features monetary policy non-neutrality in the long run. The degree of long-run non-neutrality, i.e. the extent to which monetary policy shifts the long-run real rate (natural rate) of the model, can be substantial when we combine low inflation targets and high levels of wealth inequality. Click here.

Call for papers 4th WE_ARE_IN Macroeconomics and Finance Conference

The Centre for Economic Policy Research (CEPR), Bank of Spain, the Bank for International Settlements (BIS) and the European Central Bank (ECB) are inviting submissions for their 2024 conference “WE_ARE_IN Macroeconomics and Finance” (16th – 17th September 2024 in Madrid, Spain).

Submission Deadline: Tuesday, 30 April 2024.

Research Feature - March 2024

Climate Risk, Soft Information, and Credit Supply.

Laura Álvarez-Román, Sergio Mayordomo, Carles Vergara-Alert and Xavier Vives

Abstract. We study a model of the impact of climate risk on credit supply and test its predictions using data on all wildfires and corporate loans in Spain. Our findings reveal a significant decrease in credit following climate-driven events. This result is driven by outsider banks (large and diversified), which reduce lending significantly to firms in affected areas. By contrast, due to their access to soft information, local banks (geographically concentrated) reduce their loans to opaque affected firms to a lesser extent without increasing their risk. We also find that employment decreases in affected areas where local banks are not present. Click here.

Research Feature - February 2024

Dividend Restrictions and search for income.

Esther Cáceres and Matías Lamas

Abstract. We measure the reaction of search for income in mutual funds to supervisory-induced dividend restrictions on euro area banks during the COVID-19 pandemic, which operated as an exogenous shock to payouts in this sector. Using granular data on euro area-based mutual funds’ holdings, we show that demand for dividends motivated portfolio decisions in this period and that these decisions had implications for stock returns. Specifically, we document that there were more sales of bank stocks by income-oriented funds after payout restrictions were set in place. These funds were however less inclined to dispose of bank CoCos, an alternative high income-generating asset issued by credit institutions and not subject to supervisory distribution limits. Lastly, we analyze the price impact of these portfolio adjustments, documenting negative abnormal returns in bank stocks more exposed to income-oriented funds after the policy announcement. Our research evidences that search for income is relevant in asset allocation decisions and price formation, and quantifies some of the side effects of dividend restriction policies. Click here.

Research Feature - January 2024

Climate-conscious monetary policy.

Anton Nakov and Carlos Thomas

Abstract. We study the implications of climate change and the associated mitigation measures for optimal monetary policy in a canonical New Keynesian model with climate externalities. Provided they are set at their socially optimal level, carbon taxes pose no trade-offs for monetary policy: it is both feasible and optimal to fully stabilize inflation and the welfare-relevant output gap. More realistically, if carbon taxes are initially suboptimal, trade-offs arise between core and climate goals. These trade-offs however are resolved overwhelmingly in favor of price stability, even in scenarios of decades-long transitions to optimal carbon taxation. This reflects the untargeted, inefficient nature of (conventional) monetary policy as a climate instrument. In a model extension with financial frictions and central bank purchases of corporate bonds, we show that green tilting of purchases is optimal and accelerates the green transition. However, its effect on CO2 emissions and global temperatures is limited by the small size of eligible bonds’ spreads. Click here.

Research Feature - December 2023

A score function to prioritize editing in household survey data: a machine learning approach.
Nicolás Forteza and Sandra García-Uribe

Abstract. Errors in the collection of household finance survey data may proliferate in population estimates, especially when there is oversampling of some population groups. Manual case-by-case revision has been commonly applied in order to identify and correct potential errors and omissions such as omitted or miss-reported assets, income and debts. We derive a machine learning approach for the purpose of classifying survey data affected by severe errors and omissions in the revision phase. Using data from the Spanish Survey of Household Finances we provide the best-performing supervised classification algorithm for the task of prioritizing cases with substantial errors and omissions. Our results show that a Gradient Boosting Trees classifier outperforms several competing classifiers. We also provide a framework that takes into account the trade-off between precision and recall in the survey agency in order to select the optimal classification threshold. Click here.

Call for applications for the economic history research grants programme

The Banco de España has for some time been pursuing a range of initiatives aimed at promoting
research into economic history, particularly on financial and banking-related matters, and above
all research drawing on the archives of the Banco de España itself. You can find more information here.

Research Feature - November 2023

Public Guarantees and Private Banks’ Incentives: Evidence from the COVID-19 Crisis.
Gabriel Jiménez, Luc Laeven, David Martínez-Miera and Jose-Luis Peydró

Abstract. We show that private incentives shape the allocation of public guaranteed loans (PGL), resulting in weaker banks shifting riskier corporate loans to taxpayers. We exploit credit register data during the COVID-19 shock in Spain, and a stylized model guides the empirics. Unlike non-PGL, banks provide more PGL to riskier firms in which banks have higher pre-crisis shares of firm total credit. Importantly, effects are stronger for less solid banks. Results using firm(-bank) fixed effects and loan volume/price information suggest a supply-driven mechanism. Exploiting exogenous variation across similar firms with different PGL access, we corroborate our previous findings, and show that PGL increases banks’ overall lending — and credit share — to riskier firms, especially for less solid banks. We show how these results have relevant real effects at the firm level in terms of firm survival and investment. Click here.

We are on the Job Market!

The Banco de España seeks to hire PhDs in economics, finance or related fields, with experience or recent graduates, for our headquarters in Madrid. We have a special interest in candidates with a focus on monetary and fiscal policies, finance, environmental economics, macroeconomic modelling, empirical microeconomics and industrial organization. A good command of written and spoken Spanish will be highly valued.

The Banco de España offers an excellent work and research environment, an attractive benefits package, the opportunity to collaborate with a team of committed and highly-qualified professionals, and to participate in working groups with other international institutions. For more details click here and here.

Access to Microdata on Loans and Economic Indicators (CIR_CBI) at BELab

External researchers can now explore granular data on loans to legal persons from the Central Credit Register (CCR) alongside economic and financial indicators sourced from the Central Balance Sheet Data Office (CBSO). This combination allows researchers to comprehensively profile and analyze companies. If you want to learn more details about this new dataset, click here.

Research Feature - October 2023

New technologies and jobs in Europe.
Stefania Albanesi, António Dias da Silva, Juan F. Jimeno, Ana Lamo and Alena Wabitsch

Abstract. We examine the link between labour market developments and new technologies such as artificial intelligence (AI) and software in 16 European countries over the period 2011- 2019. Using data for occupations at the 3-digit level in Europe, we find that on average employmentshares have increased in occupations more exposed to AI. This is particularly the case for occupations with a relatively higher proportion of younger and skilled workers. This evidence is in line with the Skill-Biased Technological Change theory. While there is heterogeneity across countries, very few countries show a decline in the employment shares of occupations more exposed to AI-enabled automation. Country heterogeneity for this result appears to be linked to the pace of technology diffusion and education, but also to the level of product market regulation (competition) and employment protection laws. In contrast to the findings for employment, we find little evidence for any correlation between wages and potential exposures to new technologies. Click here.

Banco de España published its external evaluation of research activities

This Evaluation —initiated in 2022— comprises the critical review of the Banco de España's research with a focus on governance and the impact of research activity on the exercise of the Banco de España's functions, at both national and international level. Click here for the full report.