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Turkey | Upside surprise from core prices

September 3, 2018
Consumer prices increased 2.3% (mom) in August slightly higher than our estimate and market consensus (2.0% vs. 2.2%), leading the annual figure to rise to 17.90% from 15.85% in July. Annual core inflation accelerated to 17.2% in August from 15.1% on top of strengthening exchange rate pass-thru and climbing cost-push factors.

The labour share in the service economy

September 3, 2018
Labour’s share of national income has dropped in most of the developed countries and emerging economies in the past few decades. However, this trend is not common across industries: the share of income accounted for by wages has seen an increase in the service industry, while it has recorded a fall in the rest of industries.

Digital transformation, concentration of production, and monetary policy

September 3, 2018
The US Federal Reserve closed the summer with its famous annual symposium at Jackson Hole, where renowned economists delve into topics of key importance to monetary policy. The meeting addressed one of the growing concerns about digitisation, namely the ever greater concentration of economic activity in a small number of large companies.

Financial and fiscal shocks in the Great Recession and recovery of the Spanish economy

September 3, 2018
We present a new Bayesian DSGE model with a banking sector for the Spanish economy, designed to evaluate structural reforms and to decompose the main macroeconomic aggregates into structural shocks. Our analysis highlights the fundamental role of financial conditions during the Great Recession and the subsequent recovery of the Spanish economy.

Research Insights from Jackson Hole

September 1, 2018
This year's symposium at Jackson Hole focused on the changes to market structures (i.e. competition, concentration... among others) brought by new technologies. Showcasing research insights from leading academics, it centered on the evidence, causes and implications to the economy and future monetary policy.

Financial Regulation: Weekly Update. 31 August 2018

August 31, 2018
BCBS publishes amendments on Pillar 3 requirements. EBA issues three different consultations on supervisory reporting (for NPEs, STS and LCR). ECB issues opinions on prudential treatment of investment firms and covered bonds directive. OCC consults on proposal to modernise the CRA. FRB and FDIC extend submission deadline for some resolution plans.

How prepared are European banks to comply with MREL?

August 30, 2018
The estimated MREL deficit for European banks based on three subordination scenarios would be 195 billion euros under the recommendation of the EBA, 301 billion euros according to the compromise text of the Council and 526 billion under a full subordination scenario. Therefore, the subordination requirement will be crucial in the future MREL requirement of European banks.

US-Mexico trade agreement: the best one that was possible under the current circumstances

August 29, 2018
The presidents of Mexico and the US have announced a preliminary bilateral commercial agreement. If congresses in each country approve it, this accord will replace the North American Free Trade Agreement (NAFTA) that has been in place since 1994.

Mexico | Demand deposits maintain the dynamism of traditional bank deposits

August 29, 2018
In June 2018 the nominal annual growth rate of traditional bank deposits (demand + term) was 11.8% (6.9% real), higher than that observed in May (11.3%), and 1.7 percentage points above the nominal rate registered in March 2017.

Might Turkey affect Mexico?

August 29, 2018
In the past few weeks Turkey has been through bouts of significant financial turbulence. The Turkish lira has depreciated by 22% in August and by about 60% so far this year. An event of this nature in an emerging economy usually has effects on other emerging economies.

Argentina | Real Estate and Construction Outlook 2018

August 28, 2018
Exchange rates over the past few years have had a positive impact on the real estate sector, yet recent currency upheaval has given rise to a considerable deterioration in accessibility conditions. Even so, the slowdown should prove to be only fleeting and there is not likely to be any huge increase in the supply of properties that might prompt a downward price correction.

Housing and inequality

August 27, 2018
There is growing concern about inequality in the developed economies. Now that we are seeing a recovery in the Spanish property sector, it is worth reflecting on the role that trends in the housing market have played and may play in widening or narrowing differences among people’s income and wealth.

The costs of Trump’s protectionism

August 27, 2018
The brief history of Trump’s protectionism has been an eventful one. In the first year of his term the US focused on the renegotiation of NAFTA, which is currently on hold. In his second year concentrated efforts above all on measures and threats against China, which have intensified to the point where he has threatened to extend the measures to all imports from the China.

U.S. | Mission Impossible: NAIRU Fallout & the Unobservables

August 25, 2018
Powell’s speech at Jackson Hole Symposium sets policy course for current normalization cycle.