Asian Economic Papers

Philip R. Lane: Euro area international financial flows: analytical insights and measurement challenges

Retrieved on: 
tisdag, februari 13, 2024
Brookings Institution, Quarterly Journal of Economics, Journal of Financial Economics, SSRN, Climate change, Map, IMF Economic Review, Nation, Federal Reserve, Statistics, Adjustment, International economics, BEA, Financial economics, Cambridge University Press, Swings, ESS, Bank, Asian Economic Papers, Buildup, ECI, Data, Director of National Parks, WP, Journal, Spes, Banco de Portugal, International Monetary Fund, Foreign direct investment, Communication, Fiscal, Environment, BIS, ESCB, Sector, BRICS, G-20, Capital, External, Frankfurt, Carbon, Insurance, Central bank, European Central Bank, Quarterly Journal, Speech, Appetite, Research, Reproduction, Exchange, Outline, MNE, Aftermath, Answer, Data management, Geography, FDI, Sound, Banco, COVID-19, Policy, Creditor, Role, ECB, Security (finance)

We document how gas price fluctuations have a heterogeneous pass-through to euro area prices depending on the underlying shock driving them.

Key Points: 
  • We document how gas price fluctuations have a heterogeneous pass-through to euro area prices depending on the underlying shock driving them.
  • Supply shocks, moreover, are found to pass through to all components of euro area inflation – producer prices, wages and core inflation, which has implications for monetary policy.

The great retrenchment in euro area external financial flows in 2022 – insights from more granular balance of payments statistics

Retrieved on: 
fredag, juni 30, 2023
Insurance, Industry, Journal of Financial Economics, OFI, OECD, Asian Economic Papers, Journal, Time, Ofie Kodjoe, Environment, Bergantes (river), Eurozone, Research, Quarterly Journal of Economics, Financial economics, Lane, FDI, ECB, Map, Payment, Behavior, Schreger line, Banco de Portugal, International economics, Quarterly Journal, COVID-19, SSRN, Capital allocation line, Joint European Torus, Neiman, Speech, Central bank, Answer, Statistics, ANSI T1.413 Issue 2, P, GDP, Role, Bank, Security printing, Financial services, Bookkeeping, Security (finance), Cryptocurrency, Economics, Euro, Eurosystem
Key Points: 

Yes, Australian businesses have become less dynamic. But there are bigger reasons for our sliding productivity growth

Retrieved on: 
söndag, juni 25, 2023
Survivor, Uncertainty, Pessimism, Technology, Industry, Education, Review, Policy, Carbon, Competition, Asian Economic Papers, Population, Risk, Productivity Commission, European, Growth, Forest Products Commission, Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd, Agriculture, Real estate, Conveyor system, Rail transport, Renewable energy, Airline, Creative industries, Rope, Warehouse, Construction, Retail

Since 2005, annual labour productivity growth (growth in output per hour worked) has been the best part of one percentage point below its long-term average in Australia and other developed countries.

Key Points: 
  • Since 2005, annual labour productivity growth (growth in output per hour worked) has been the best part of one percentage point below its long-term average in Australia and other developed countries.
  • The Productivity Inquiry that I helped conduct for the Productivity Commission found this will lead to much-slower improvements in Australians’ living standards than in the past.
  • A study that I have just published in Australian Economic Papers, reviews the evidence and finds that while most of these things have happened (and while many are undesirable) they aren’t sufficient to explain what’s happened to productivity.
  • The findings suggest that even if we did make our economy more competitive and businesses more dynamic (and we probably should) improving productivity growth depends on a much bigger set of policy reforms.

Firm entry and exit has been slowing

    • In Australia, the rates of firm entry and exit (meaning companies either joining or dropping out of an industry) declined between 2005–06 and 2012–13.
    • While there’s been an increase in firm entry more recently, it’s been mainly among non-employing business – sole traders and independent contractors – rather than bigger businesses.

Job-switching has slowed

    • Another explanation might be that Australian businesses face a less volatile environment, suggesting job turnover does not have value in its own right.
    • While job churn tends to fall if barriers to job mobility rise, it also falls when businesses face fewer shocks, making any link between declining job turnover and diminished competition ambiguous.

Business investment has slowed


    Non-mining business investment in Australia has stagnated over recent decades, as it has in a number of other advanced economies. Among the suggested explanations are risk aversion and uncertainty, pessimism about the future and lower productivity growth. The role, played by competition – if any – is far from clear.

Business concentration has climbed

    • Most of the increased concentration appears to have been in already-concentrated industries, with technological advances and exposure to imports explaining a lot of it.
    • As an example, concentration has increased in “warehousing and storage”, but the industry has taken advantage of technological advances including parcel tracking and smart warehouses, meaning both concentration and competition have increased as firms have scaled up to install new technologies.

Businesses profit margins have climbed


    Markups (profit margins) appear to have climbed by around 57% in Australia between 1980 to 2016, which is less than in the US, Canada and much of the European Union, but greater than in New Zealand and most Asian countries except for South Korea. But markups at the level of the firm are difficult to measure because they depend on assumptions about the way the firm makes its products. Different assumptions can produce very different estimates.

There are only a few highly-productive firms

    • Globally and in Australia the most-productive firms seem to be three to four times more productive than the less productive, but, at least in Australia, there is little evidence to suggest the gap is widening.
    • What evidence there is suggests the gap between the most-productive Australian firms and the most-productive global firms is widening, suggesting all Australian firms are slower to adopt leading technologies than they were.

We’re at risk of chasing the wrong target

    • Fixing our productivity problem requires a suite of changes that address these and other issues.
    • In March, the Productivity Commission laid out a roadmap.
    • Blaming declining dynamism and declining competition for declining productivity is not just a diversion, it risks making us do the wrong things.