Insights, analysis and other news from @ecb researchers. Authors' views are their own, and not necessarily those of the European Central Bank.
Frankfurt am Main, Germany
Joined October 2022
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The starkest finding: young workers (15–24) are hit hardest. Their participation drops after a growth shock and doesn't recover for up to 8 years – scarring that can mark an entire generation's attachment to the labour market. #EconTwitter 4/5
First causal estimate of EU participation cyclicality: a shift-share IV + local projections on EU-LFS microdata (15 countries, 114 regions, 2000–2020). Policy punchline: a stable participation rate can still hide real labour market slack. #MonetaryPolicy #EconTwitter 5/5
🧵New @ecb Working Paper by D. Sondermann & C. Petrakis “Hidden in the aggregate: the cyclicality of EU labour force participation” ecb.europa.eu/pub/pdf/scpwps… 1/5
The EU's aggregate labour force participation rate is remarkably resilient to recessions. Unlike in the US, where it slumps for years after a shock. But that steady headline number hides a lot. A thread on what's #HiddenInTheAggregate 2/5
🧵New @ecb Working Paper by G. Spanò & J.M. Figueres “Banks’ funding structures and pass-through in the euro area” ecb.europa.eu/pub/pdf/scpwps… 1/2
🧵New @ecb Working Paper by C. Mavrogiannis & N. Zorell & C. Zwick “Can structural reforms unleash private investment?” ecb.europa.eu/pub/pdf/scpwps… 1/4
Major labour and product market reforms are found to increase the level of real private investment by up to 5% cumulatively within six years. 3/4
New @ecb Working Paper by M. Groiss & D. Sondermann “Monetary policy and the rigidity of firm employment expectations” ecb.europa.eu/pub/pdf/scpwps…
🧵New @ecb Working Paper by A. De Sanctis, S. Gebauer, F. Holm-Hadulla & M. Sirani “Financial frictions across the production network and the transmission of monetary policy” ecb.europa.eu/pub/pdf/scpwps… 1/5
The indirect channel decomposes into two opposing forces. Downstream: constrained customers contract intermediate input demand, reinforcing the fall in prices and output. Upstream: constrained suppliers raise prices to protect margins, partially offsetting disinflation. 4/5
New @ecb Working Paper by M. Bräutigam et al. “MuSE: a multiple macro-financial scenario simulation engine for stress testing” ecb.europa.eu/pub/pdf/scpwps…
Throwback to the @ecb Annual Research Conference where Nobel Prize winner Paul Krugman discussed Europe’s competitiveness, innovation & fragmentation in a changing global economy. Catch up on the ARC papers ecb.europa.eu/press/conferen… and watch the podcast 👇 youtu.be/nIcDcOXJKU0?si=kdkH…
🧵New @ecb Research Bulletin by O. De Jonghe & C. Huylebroek “Private equity beyond the target: how buyouts reshape supply chains” ecb.europa.eu/press/research… 1/5
The advantage does not survive a downturn. Suppliers of PE-backed firms stop outperforming and their markups fall by ~8%. Buyouts are leveraged, so preserving cash bites hardest exactly when sales fall: owners renegotiate, switch suppliers, redesign the chain. 4/5