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This paper proposes a new way of computing a coincident indicator for economic activity in France using data from business surveys. We use the generalized dynamic factor model à la Forni and others (2000) to extract common components from a large number of survey observations. The results obtained show that the resulting indicator forecasts economic activity with a relatively high degree of accuracy before the release of actual data.

Economic forecasting --- Economic surveys --- Surveys --- Methodology. --- France --- Economic conditions. --- Investments: Stocks --- Macroeconomics --- Statistics --- Multiple or Simultaneous Equation Models: Models with Panel Data --- Survey Methods --- Forecasting and Other Model Applications --- Prices, Business Fluctuations, and Cycles: Forecasting and Simulation --- Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) --- General Financial Markets: General (includes Measurement and Data) --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Economic growth --- Econometrics & economic statistics --- Investment & securities --- Cyclical indicators --- Economic and financial statistics --- Business cycles --- Stocks --- Financial institutions --- Economic statistics

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The COVID-19-triggered collapse in oil prices in March and April 2020 was the seventh, and by far the most severe, in a series of such collapses since 1970. This paper, first, compares this most recent collapse and its drivers with previous ones in an event study. It finds that it was associated with an exceptionally severe plunge in oil demand. Second, in a local projections model, this paper estimates the implications of demand- and supply-driven oil price collapses for growth in emerging markets and developing economies (EMDEs). The paper finds that steep oil price collapses were associated with significant and lasting output losses in energy-exporting EMDEs but no meaningful output gains in energy-importing EMDEs. These results are robust to multiple robustness checks.

Coronavirus --- COVID-19 --- Demand Factors --- Economic Growth --- Emerging Market Economies --- Energy Markets --- Energy Policies and Economics --- Local Projections Model --- Macroeconomic Impact --- Macroeconomic Management --- Oil and Gas --- Oil Prices --- Pandemic Impact --- Supply Factors

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This paper studies commodity price cycles and their underlying drivers using a dynamic factor model. The study employs a sample of 39 monthly commodity prices over 1970:01 to 2019:12. The analysis identifies global and group-specific cycles in commodity markets and includes them in a structural vector autoregressive model together with measures of global economic activity and global inflation, to disentangle their response to global demand, global supply, and commodity market-specific shocks. The findings reveal the following main results. (i) There exists a global cycle in commodity markets that accounts for an increasing fraction of co-movement in commodity prices over the past two decades, particularly for energy, metals, and precious metals. (ii) The results are heterogeneous across groups of commodities, with group-specific commodity cycles existing for grains and precious metals over the full sample period, 1970-2019. Metal and energy prices exhibit within-group synchronization over 1970-99; however, in recent years, their movements have become increasingly aligned with the global business cycle. (iii) Since 2000, the global commodity cycle is largely driven by global supply shocks, such as rapid productivity growth in emerging markets and developing economies, which increase demand for commodities. (iv) The large price spikes observed during the two most prominent commodity market boom-bust episodes of the past half-century (1972-74 and 2006-08) are driven additionally by shocks that are orthogonal to global economic activity such as shifts in speculative demand for commodities.

Terms of trade. --- Prices.

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Recently, the export performance of France relative to its own past and relative to a major trading partner, Germany, deteriorated. That deterioration seems related to the geographical destination and product composition of trend exports. Faced with an increase in unit labor costs or in its terms of trade, France adjusts relatively less via price and wage changes, and more via employment changes. Given that SMIC convergence resulted in a significant increase in unit labor costs, foreign sector difficulties might be structural. Trade flows relevance and euro area policy constraints highlight the importance of structural reforms that increase markets flexibility.

Competition -- France -- Econometric models. --- Competition -- Germany -- Econometric models. --- Exports -- France -- Econometric models. --- Exports -- Germany -- Econometric models. --- France -- Economic conditions -- 1945- -- Econometric models. --- Germany -- Economic conditions -- 1945-1990 -- Econometric models. --- Commerce --- Business & Economics --- International Commerce --- Export marketing --- Competition, International. --- International competition --- World economics --- International marketing --- Overseas marketing --- International relations --- International trade --- War --- Marketing --- Economic aspects --- Exports and Imports --- Labor --- Economic Theory --- Trade: General --- Agriculture: Aggregate Supply and Demand Analysis --- Prices --- Wages, Compensation, and Labor Costs: General --- Empirical Studies of Trade --- International economics --- Economic theory & philosophy --- Labour --- income economics --- Exports --- Supply shocks --- Export performance --- Labor costs --- Terms of trade --- Supply and demand --- Economic policy --- nternational cooperation --- France

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Climate change is likely to lead to more frequent and more severe supply and demand shocks that will present a challenge to monetary policy formulation. The main objective of the paper is to investigate how climate shocks affect consumer prices in a broad range of countries over a long period using local projection methods. It finds that the impact of climate shocks on inflation depends on the type and intensity of shocks, country income level, and monetary policy regime. Specifically, droughts tend to have the highest overall positive impact on inflation, reflecting rising food prices. Interestingly, floods tend to have a dampening impact on inflation, pointing to the predominance of demand shocks in this case. Over the long run, the dominant monetary policy paradigm of flexible inflation targeting faced with supply-induced climate shocks may become increasingly ineffective, especially in LIDCs. More research is needed to find viable alternative monetary policy frameworks.

520 Milieubeleid --- 430 Financiën --- VEKP --- Macroeconomics --- Economics: General --- Natural Disasters --- Environmental Economics --- Inflation --- Money and Monetary Policy --- Price Level --- Deflation --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Monetary Policy --- Climate --- Natural Disasters and Their Management --- Global Warming --- Economic & financial crises & disasters --- Economics of specific sectors --- Natural disasters --- Climate change --- Monetary economics --- Environment --- Prices --- Monetary policy frameworks --- Monetary policy --- Currency crises --- Informal sector --- Economics --- Climatic changes --- New Zealand