Nina Furbach
- 23 September 2024
- ECONOMIC BULLETIN - ARTICLEEconomic Bulletin Issue 6, 2024Details
- Abstract
- Over the past few decades, the euro area has gradually lost market share in global trade. This article describes the long-term trends underlying the decline in the euro area’s market share, relating it to losses in competitiveness in foreign markets. It explains how a series of recent global shocks – such as pandemic-related supply disruptions, geopolitical tensions and the energy shock following Russia’s invasion of Ukraine – as well as other factors affecting price and non-price competitiveness had an asymmetric impact on the euro area compared with its main trading partners and exposed important vulnerabilities in its external competitiveness. These vulnerabilities are particularly significant in view of the challenges ahead, which are linked to the persistence of the energy shock, risks associated with geo-economic fragmentation and the ongoing structural transformation of the European and global economies.
- JEL Code
- F14 : International Economics→Trade→Empirical Studies of Trade
- 18 June 2024
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 4, 2024Details
- Abstract
- Since the start of 2018 automotive production and exports in the euro area have both contracted by about 20%, while they have fared better in China, Japan, Korea and the United States. The current weakness is mostly a result of declining demand for combustion engines in the context of net zero emission targets and hesitancy to purchase hybrid and electric vehicles. Other factors, such as supply chain disruptions, adverse energy supply shocks and monetary tightening have also negatively contributed to the drop in automotive production. Despite intensified foreign competition, the euro area automotive industry has defended its global positioning by focusing on profitable market segments. A recovery can be expected in the medium term as adverse factors related to supply bottlenecks and tight financing conditions fade away. However, risks to the outlook are elevated. These are associated with the digital innovation gap vis-a-vis the United States and China as well as geopolitical tensions, which can disrupt supply chains.
- JEL Code
- E3 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles
F1 : International Economics→Trade
L62 : Industrial Organization→Industry Studies: Manufacturing→Automobiles, Other Transportation Equipment
- 12 February 2024
- WORKING PAPER SERIES - No. 2906Details
- Abstract
- This paper studies how demographics affect aggregate labor market power, the urban wage premium and the spatial concentration of population. I develop a quantitative spatial model in which labor market competitiveness depends on the demographic composition of the local workforce. Using highly disaggregated administrative data from Germany, I find that firms have more labor market power over older workers: The labor supply elasticity decreases from more than 2 to 1 from age 20 to 64. Calibrating the model with the reduced-form elasticity estimates, I find that differences in labor supply elasticities across age groups can explain 4% of the urban wage premium and 2% of the spatial concentration of population. Demographics and skill together account for 10% of the urban wage premium and 2% of agglomeration.
- JEL Code
- J11 : Labor and Demographic Economics→Demographic Economics→Demographic Trends, Macroeconomic Effects, and Forecasts
J31 : Labor and Demographic Economics→Wages, Compensation, and Labor Costs→Wage Level and Structure, Wage Differentials
J42 : Labor and Demographic Economics→Particular Labor Markets→Monopsony, Segmented Labor Markets
R23 : Urban, Rural, Regional, Real Estate, and Transportation Economics→Household Analysis→Regional Migration, Regional Labor Markets, Population, Neighborhood Characteristics