/library/oar/handle/123456789/16884 2026-06-16T12:49:50Z 2026-06-16T12:49:50Z /library/oar/handle/123456789/33778 2018-09-15T01:39:17Z 2016-01-01T00:00:00Z

Title: Savings and investment behaviour in the euro area Editors: Palenzuela, Diego Rodriguez; Dees, Stephane Abstract: Although monetary union created the conditions for improving economic and financial integration in the euro area, in the context of the financial and sovereign crises, it has also been accompanied by the emergence of severe imbalances in savings and investment, credit and housing booms in some countries and the allocation of resources towards less productive sectors. The global financial crisis and the euro area sovereign debt crisis then led to major and abrupt adjustments as the risks posed by the large imbalances materialised. Although the institutional shortcomings in the EU that permitted the emergence of imbalances have been largely addressed since 2008, the adjustment process is not yet complete. From a macroeconomic perspective, the imbalances in the external accounts have led to the accumulation of high levels of external liabilities that need to be reduced, which, in turn, is weakening investment and therefore weighing on growth prospects and growth potential. From a macroprudential perspective, the lingering imbalances have added to systemic risk and rendered the euro area more vulnerable to risks. This Occasional Paper analyses the dynamic patterns in macroeconomic imbalances primarily from the former perspective, addressing in particular the connections between macroeconomic and sectoral adjustments of imbalances and the challenges for economic growth and performance over a longer horizon.

2016-01-01T00:00:00Z Micallef, Brian /library/oar/handle/123456789/33771 2020-11-24T10:58:59Z 2016-01-01T00:00:00Z

Title: The adjustment of Maltese firms to the post-crisis economic environment : evidence from a firm-level survey Authors: Micallef, Brian Abstract: In contrast to the experience of southern and peripheral economies in the euro area, Malta has weathered the financial crisis relatively well and its labour market remained resilient in the face of shocks. Using information from a firm-level survey conducted in 2014, this paper focuses on the nature of the shocks hitting the economy after the crisis and the reaction of Maltese firms to these shocks. Concerning the latter, a distinction is made between the firms’ decisions to adjust their workforce and on the wages given to new hires compared to incumbents. The empirical analysis is conducted with a multivariate probit framework that controls for both firm and workforce specific characteristics as well as the nature of the shocks faced by the firms. The results highlight the high degree of heterogeneity in demand conditions across sectors although concerns about skill shortages were broad-based.

2016-01-01T00:00:00Z /library/oar/handle/123456789/33663 2018-09-13T01:38:53Z 2016-08-01T00:00:00Z

Title: Labour market modelling in the light of the financial crisis Abstract: This paper revisits the empirical relationship between unemployment and output, and its evolution following the financial crisis of 2008, with the aim of drawing potential consequences for labour market modelling strategies in place within the European System of Central Banks (ESCB). First, the negative correlation between output and unemployment (Okun's law) at cyclical frequencies is found to be a robust feature of macro data across time, countries and identification schemes. Focusing on the euro area, the financial distress seems to have altered the dynamics of output and unemployment mainly at lower frequencies, interpreted as trend developments by the statistical filters used in the analysis. Looking at the implications for modelling strategies, we propose an extension of the standard labour search and matching model in which financial frictions impinge directly on the labour market rather than on the capital market, opening the way to protracted and lagged response of employment after a "financial" crisis. In terms of policy implications, the importance of the interplay between financial and labour market frictions in trend developments should be read as strong support for an ambitious structural reform agenda in Europe, so as to make our labour (and goods) markets more flexible and resilient.

2016-08-01T00:00:00Z Micallef, Brian /library/oar/handle/123456789/33662 2018-09-13T01:38:51Z 2016-01-01T00:00:00Z

Title: Drivers of low inflation in Malta after the crisis Authors: Micallef, Brian Abstract: Despite robust growth, inflation in Malta has been subdued after the crisis and lower than what a Phillips curve would imply. This study examines the determinants of low inflation by comparing inflation forecasts conditioning on three groups of variables – real activity, external and financial – to see which one of these categories best explains post-crisis inflation. The analysis is conducted within a Bayesian VAR (BVAR) framework over two different disinflation periods, the first one starting in mid-2008 and the other one in 2012. For Malta, forecasts conditional on the path of the external variables are the closest to the actual path of inflation in both periods. On the contrary, in the euro area, the first episode was driven by external factors but domestic factors played a more important role in the second one. This point to the significant cross-country heterogeneity among euro area countries even in the face of apparently similar patterns in headline inflation.

2016-01-01T00:00:00Z