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Europe > Slovenia, Republic of

You are looking at 1 - 4 of 4 items for :

  • Type: Journal Issue x
  • Business Fluctuations; Cycles x
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Cover IMF Working Papers
Firm Leverage and Boom-Bust Cycles
Can Sever
This paper explores the dynamic relationship between firm debt and real outcomes using data from 24 European economies over the period of 2000-2018. Based on macro data, it shows that a rise in credit to firms is associated with an increase in employment growth in the short-term, but employment growth declines in the medium-term. This pattern remains similar, even when the changes in credit to households are accounted for. Next, using data from a large sample of firms, it shows that firm leverage buildups predict similar boom-bust growth cycles in firm employment: Firms with a larger increase in leverage experience a boost in employment growth in the short-term, but employment growth decreases in the medium-term. Relatedly, the volatility of employment growth increases in the aftermath of firm leverage buildups. Finally, this paper provides suggestive evidence on the role of a financial channel in the relationship between firm leverage buildups and employment growth. The results show that a rise in firm leverage is associated with a persistently higher debt service ratio, pointing the drag on finances. Consistently, boom-bust growth cycles in the aftermath of firm leverage buildups are not limited to employment growth, but are also pronounced for investment. Moreover, the medium-term decline in firm employment growth as predicted by leverage buildups becomes even larger if aggregate financial conditions tighten. The findings are in favor of “lean against the wind” approach in policy making.
Keywords:
Firm leverage; firm debt; household debt; leverage cycles; employment; investment; boom-bust cycles; ORBIS; leverage buildup; employment growth; leverage cycle; growth cycle; cycles in the aftermath; Business cycles; Credit; Consumer credit; Credit booms; Europe; Global
Cover IMF Working Papers
Calibrating Macroprudential Policies in Europe Amid Rising Housing Market Vulnerability
Ms. Laura Valderrama
Housing market developments are in the spotlight in Europe. Over-stretched valuations amid tightening financial conditions and a cost-of-living crisis have increased risks of a sustained downturn and exposed challenging trade-offs for macroprudential policy between ensuring financial system resilience and smoothing the macro-financial cycle. Against this backdrop, this paper provides detailed considerations regarding how to (re)set macroprudential policy tools in response to housing-related systemic risk in Europe, providing design solutions to avoid unintended consequences during a tightening phase, and navigating the trade-offs between managing the build-up of vulnerabilities and the macro-financial cycle in a downturn. It also proposes a novel framework to measure the effectiveness of tools and avoid overlaps by quantifying the risks addressed by different macroprudential instruments. Finally, it introduces a taxonomy allowing to assess a country’s macroprudential stance and whether adjustments to current policy settings are warranted—such as the relaxation of capital-based tools and possibly some borrower-based measures in the event of a more severe downturn.
Keywords:
Housing markets; household vulnerability; income distribution; economic cycle; financial stability; macroprudential policy.; Macroprudential policy; housing market vulnerability; Policy tool; calibrating Macroprudential policies in Europe amide; Macroprudential Policy stance framework; Countercyclical capital buffers; Mortgages; Housing prices; Credit; Europe; Global
Cover IMF Working Papers
Nowcashing: Using Daily Fiscal Data for Real-Time Macroeconomic Analysis
Florian Misch
,
Mr. Brian Olden
,
Mr. Marcos Poplawski Ribeiro
, and
Lamya Kejji
Traditionally, fiscal data for policy analysis are derived from official reports that, depending on the country, are published either monthly, quarterly or annually, often with significant time lags. However, innovations in digitalization of government payments and accounting systems mean that real-time daily fiscal data exist in many countries. In this paper, we argue that these data contain valuable, but underutilized and underexploited information. Possible uses include (i) realtime fiscal surveillance which allows for much more timely responses to emerging signs of fiscal stress, and (ii) nowcasting economic activity, which is especially useful in countries where higher frequency GDP statistics are unavailable.
Keywords:
WP; government; balance; cash balance; economic activity; country; government banking arrangement; Nowcashing; Real-time data; Fiscal policy; Nowcasting; balances data; government payment system; government bank accounts; Government finance statistics; Currencies; PFM information systems; Global
Cover IMF Working Papers
A Fresh Look at Potential Output in Central, Eastern, and Southeastern European Countries
Jiri Podpiera
,
Ms. Faezeh Raei
, and
Ara Stepanyan
Was the postcrisis growth slowdown in Central, Eastern and Southeastern Europe (CESEE) structural or cyclical? We use three different methods—production function approach, basic multivariate filter, and multivariate filter with financial frictions—to evaluate potential growth and output gaps for 18 CESEE countries during 2000-15. Our findings suggest that potential growth weakened significantly after the crisis across most countries in the region. This decline appears to be largely due to stagnant productivity and weaker capital accumulation, which were associated with common external factors, including trading partners’ slow potential growth, but also decline in global trade and stalled expansion of global value chains. Our estimates suggest that output gaps in 2015 were largely closed in many countries in the region.
Keywords:
WP; output gap estimate; CESEE; Potential output; Output gap; Emerging Markets; core inflation; output gap amplitude; MVF FIN; CESEE economy; Capacity utilization; Inflation; Total factor productivity; Global; Baltics; Central and Eastern Europe