The Bank of Spain (Spanish: Banco de España) is the central bank of Spain. Established in Madrid in 1782 by Charles III, today the bank is a member of the European System of Central Banks and is also Spain's national competent authority for banking supervision within the Single Supervisory Mechanism. Its activity is regulated by the Bank of Spain Autonomy Act.
This paper examines the impact of an experiment in North Macedonia in which vulnerable unemployed individuals applying to a subsidized employment program were randomly selected to attend job interviews. Employers hiring a new employee from the target population receive a subsidy covering the wage cost of the worker for the first six months. Using administrative employment data, we find that attending the job interview led to an increase of 15 percentage points in the likelihood of being employed 3.5 years after the start of the intervention. We also find positive and statistically significant effects on individuals' non-cognitive and work-related skills.
Those of professional forecasters do. For a wide range of time series models for the euro area and its member states we find a higher average forecast accuracy of models that incorporate information on inflation expectations from the ECB’s SPF and Consensus Economics compared to their counterparts that do not. The gains in forecast accuracy from incorporating inflation expectations are typically not large but significant in some periods. Both short- and long-term expectations provide useful information. By contrast, incorporating expectations derived from financial market prices or those of firms and households does not lead to systematic improvements in forecast performance. Individual models we consider are typically better than univariate benchmarks but for the euro area the professional forecasters are more accurate, especially in recent years (not always for the countries). The analysis is undertaken for headline inflation and inflation excluding energy and food and both point and density forecast are evaluated using real-time data vintages over 2001-2019.
We identify and study analytically three key channels that shape how inflation affects wealth inequality: (i) the traditional wealth (or Fisher) channel through which inflation redistributes from lenders to borrowers; (ii) an income channel through which inflation reduces the real value of sticky wages and benefits; and (iii) a relative consumption channel through which heterogeneous increases in the prices of different goods affect people differently depending on their consumption baskets. We then quantify these channels during the 2021 inflation surge in Spain using detailed, high-frequency customer-level data from one of the main commercial banks. The unexpected nature of the inflation shock and its perception as temporary in this period in particular closely fit the assumptions behind our theoretical decomposition. Results show that the wealth and income channels are an order of magnitude larger than the consumption channel. Middle-aged individuals were, in net terms, largely unaffected by inflation, while the elderly suffered the most. We find similar results when using representative surveys on households’ wealth, income, and consumption.
We develop a general equilibrium model of the U.S. mortgage market where securitization shapes households' access to credit and housing. The model matches the long-run behavior of mortgage rates, credit growth, and house prices following the development of securitization. Securitization improves market efficiency but is subject to adverse selection: lenders are privately informed about mortgage quality. Surges in household defaults then drive down security prices, reducing lender liquidity and contracting credit supply. Applied to the Global Financial Crisis (GFC), the model replicates two-thirds of the contraction in residential mortgage credit observed in the data. How important were information frictions in accounting for these dynamics? We estimate an information-friction multiplier of around 1.2, suggesting a powerful amplification effect. Evaluating post-GFC credit guarantee policies, we find that expanded coverage has stabilized credit but guarantees remain underpriced. Pricing them to reflect the amplification effect of information frictions covers the associated fiscal costs and delivers welfare gains for all households.
This paper introduces the Euro Area Communication Event-Study Database (EA-CED), a new dataset tracking intraday financial market movements around 304 ECB Governing Council meetings (ECBGC) and 5,100 inter-meeting communication (IMC) events by GC members, primarily in the form of speeches and interviews. We document that IMC events are associated with significant market movements often comparable to, or larger than, those following ECB policy announcements, particularly for longer maturity yields. Importantly, these effects are not limited to communication from the ECB President but also from other Governing Council members. Like ECBGC announcements, IMC events convey multidimensional information: three structurally identified factors explain a large share of the yield curve movements around IMC surprises. Finally, we show that IMC events provide relevant information for identifying the effects of monetary policy shocks on euro area output and inflation in a Bayesian Vector Autoregression model.
