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Correlations between adjustments in employment (total hours worked, panel (a) and nominal hourly wages (panel b) and index of credit difficulties). Note: National accounts (Private sector only) and index of credit difficulty (mean values for each country).
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The sovereign debt crisis led to financial difficulties for European firms and a decline in the use of labour input. We use qualitative firm-level data for 24 European countries, collected within the third wave of the Wage Dynamics Network (WDN3) of the ESCB, to propose a cross-country analysis of the relationship between a credit shock and labour...
Contexts in source publication
Context 1
... Figure 4 plots the correlation between our credit difficulty index and important labour market macro variables, drawn from national accounts, measuring changes in the use of labour (measured by total hours worked) and nominal hourly wages during the period 2010-2013. Figure 4 shows that there is a clear negative correlation between the change in employment at the macro level and our index of credit difficulties. ...
Context 2
... Figure 4 plots the correlation between our credit difficulty index and important labour market macro variables, drawn from national accounts, measuring changes in the use of labour (measured by total hours worked) and nominal hourly wages during the period 2010-2013. Figure 4 shows that there is a clear negative correlation between the change in employment at the macro level and our index of credit difficulties. A (weaker) negative correlation also arises between credit difficulties and nominal wage growth. ...
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... 13 While these theories do not consider neither price setting behavior nor the role of monetary policy, they suggest that financial shocks generate substantial short-run fluctuations in wages. These predictions are corroborated by recent studies for the euro area based on microdata (Popov and Rocholl, 2018;Bodnár et al., 2018). ...
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JEL Classification: E30, E32, E51.
n the economic life of companies, various financial difficulties can appear, regardless of their object of activity, domain, geographical area, or geopolitical context. The economic reality proved that managing individual difficulties one at a time has little chance of succeeding; because of this, there are international concerns in establishing the regulatory framework and identifying instruments to ensure that the firm can overcome the financial difficulty. Concerns in this sense have been explicitly mentioned for the first time by the World Bank when Principles for effective insolvency and creditor/debtor regime were established in 2001. Recently, the European Parliament has elaborated the EU Directive 2019/1023 regarding the framework of preventive restructuring, debt remittance, and forfeiture of law, besides measures to increase the efficiency of restructuring procedures, insolvency, and debt remittance, which modifies the EU Directive 2017/1132 regarding restructuring and insolvency. While implementing the EU Directive of restructuring in national legislation, the paper analyses and synthesizes the measures of reorganizing and recovering companies while also considering the required legislative instruments. From a practical aspect, the authors’ contribution concretizes in a set of economic and financial indicators that warn/reveal the state of financial difficulty of companies. Establishing these indicators represents technical aspects that need to be clarified by the national law and the EU Directive, and it constitutes the challenge of readjusting the companies. The faster the intervention, the bigger the chances of salvaging the company. Interest in this topic is growing, given the temporary suspension of the activities of many companies caused by several factors. In the context of the measures taken to prevent the COVID-19 pandemic and increase the costs of raw materials, gas, and energy, the economic evolution is unpredictable and challenging. Considering that we are in the process of modifying the national legislation, the proposed set of indicators cannot be verified on the level of companies that encounter financial difficulties. Therefore, applying and practically verifying these economic and financial indicators will be the subject of subsequent research.
The research aims to measure the credit shock and to know the extent to which Iraqi private banks are exposed to credit shocks, and to determine their impact on banking financial soundness represented by the capital adequacy index and determine the causal relationship between the credit shock and capital adequacy, and to estimate the impact of the credit shock on capital adequacy. Statistician (10EViews V.). The study community was represented by the Iraqi private banks Selection sample made of (10) Private banks listed on the Iraq Stock Exchange. This is for its contribution to the development economic, I tested the hypotheses of the study using the descriptive analytical method based on the annual reports of the study sample for the period (2012-2020). The short-term relationship showed that (36%) of the short-term errors can be corrected in the unit time represented by the year, to return to the equilibrium position in the long term and that the effect in the short term does not persist in the long term. Seven tests confirm the existence of a long-term co-integration relationship between the study variables at the level of significance (5%) for the individual segment and the general trend, which is the presence of co-integration.
This chapter offers the unique sight on financial market’ development at post-COVID period. In this case there is a problematic situation associated with the uncertainty of predicting the growth of global financial markets. In the framework of this chapter, the task is to conduct a financial analysis of the impact of the COVID-19 pandemic on the world economy predicting different scenarios for the formation of the global financial market growth of financial indicators, depending on external indicators. The primary goal is to control the pandemic by mitigating the economic damage to populations, organizations and states. Thus, in the political arena, too, the consequences of a pandemic must already be predicted.
This study analyzes the behavior of inflation observed in the euro area over the past decade from a broad perspective. We first document changes in the inflation process, i.e. the dynamics of inflation and its response to shocks. We then discuss whether the Phillips curve is still a useful analytical paradigm. Next, we present evidence based on an Unobserved Components Model that the Phillips curve is “alive and well”, in the sense that estimates show a positive and significant relationship between slack in the economy and inflation. At the same time, there is evidence of
a downward trend in inflation in a sample that covers the past decades (1985-2017). While this past trend can be associated with a decline over time in inflation expectations, other deeper factors may be also at work, including the ongoing globalization trend, the declining bargaining power of labor, technological progress and the rise of e-commerce, demographic changes and financial factors. The complex nature of these forces and their interaction underscores the uncertainty that characterizes the current macroeconomic environment, and future research is needed to analyze to what extent these forces are likely to persist. Finally, we discuss possible implications of our analysis for monetary policy.
