Browsing by Subject "economy"

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  • Korhonen, Iikka (2021)
    Bank of Finland Bulletin. Blog
    When the Board of the Bank of Finland decided to disband the old Bilateral Trade Department, which had dealt with payments related to the Finnish-Soviet barter trade, and create a new Unit for Eastern European Economies, the main geographical focus of the new unit was supposed to be the Soviet Union. The work of this new unit began on September 1, 1991, but before the year had ended the Soviet Union had ceased to exist. The Unit nimbly changed its main focus to Russia and the three Baltic States.
  • Kaaresvirta, Juuso; Kerola, Eeva; Nuutilainen, Riikka (2021)
    BOFIT Policy Brief 13/2021
    China’s real estate and construction sector has served as a major engine of economic growth in recent decades and the sector now plays an oversized role in the economy. Much of that growth has been debt-fuelled, with the indebtedness of developers climbing to unprecedented levels. After officials turned off the money spigot last year, housing markets cooled and a wave of financial difficulties washed over builders during autumn 2021. The entire sector found itself under heavy stress, and in December two major developers, Evergrande and Kaisa, defaulted on their offshore debt. In this brief, we consider the current conditions in China’s real estate and construction sector and how a possible sectoral crisis could spread to the national economy and the euro area. While the direct financial impacts on the euro area’s financial sector is likely to be minor, China’s real estate sector problems could spill over widely into the domestic real economy and thereby increase uncertainty internationally. In such case, the indirect impacts on the euro area could be severe.
  • Simola, Heli (2020)
    BOFIT Policy Brief 11/2020
    Even with substantial uncertainty over the timing and magnitude of climate change, the potential impacts pose significant risks to long-term global economic development. This paper reviews relevant literature on economic effects of climate change with respect to Russia, which faces physical risks as well as risks created by the transition to a low-carbon economy. Most risks arise from the orientation of Russian production and exports to carbon-intensive sectors, particularly oil and gas. Nevertheless, Russia has shown little ambition in addressing risks related to climate change.
  • Bank of Finland (2015)
    Bank of Finland. Bulletin 5/2015
    Growth in corporate investment and exports is expected to be reflected in slowly improving output in the immediate years ahead. Nevertheless, owing to increased uncertainties in the global economy, there is a possibility that exports will not yet begin to rebound. On the other hand, the pick-up in domestic investment may be jeopardised if competitiveness problems cannot be resolved and the high degree of uncertainty surrounding fiscal consolidation persists. For these reasons, another possibility is that economic activity in the immediate future will be weaker than forecast.
  • Bank of Finland (2015)
    Bank of Finland. Bulletin 3/2015
    Global economic growth will gain momentum in the forecast period. The sliding oil price will benefit oil-importing countries. In the euro area, the Extended Asset Purchase Programme (EAPP) has reduced funding costs, improved lending and strengthened the confidence of economic agents. The exchange rate developments to date support the growth and inflation outlooks of the euro area and Japan, while the recovery of the US economy is consistent with the strong US dollar. The Russian economy will contract over the next two years, following the collapse of the oil price. Economic growth in China will remain relatively robust.
  • Bank of Finland (2015)
    Bank of Finland. Bulletin 3/2015
    Weaker-than-expected developments in the global economy would erode Finland’s export-driven growth. On the other hand, a more prolonged period of low commodity prices and the positive effects of accommodative monetary policy on the real economy could provide a further boost to growth. In Finland, the necessary consolidation measures will reduce domestic demand over the short term but may support growth over the longer term.
  • Vilmunen, Jouko; Korhonen, Iikka (2006)
  • Korhonen, Iikka; Simola, Heli; Solanko, Laura (2018)
    BOFIT Policy Brief 4/2018
    This note briefly reviews the history and current impacts of sanctions on Russian entities imposed by the EU, US and others, as well as Russia’s counter-sanctions imposed on Western countries. A large drop in price of oil in 2014 and 2015 coincided with these measures, complicating our efforts to tease out the specific economic effects of sanctions on the Russian economy. While it is clear that the decline in oil prices had a substantially larger impact on Russian GDP in 2014−2016 than sanctions, the sanctions regime proved effective in restricting access of Russian banks to capital. Looking specifically the impacts on EU countries, we note that the declines in trade with Russia and the EU’s reduced market share in Russia are to some extent continuations of long-term trends. Russia’s counter-sanctions have targeted, among other things, EU food exports to Russia. While the macroeconomic effects Russia’s counter-sanctions on the EU have been marginal, food sector in some EU countries has been affected. Russia’s counter-sanctions have also directly lowered consumption of affected goods in Russia.
  • Obstbaum, Meri; Sariola, Mikko; Viertola, Hannu; Lindblad, Annika; Nuutilainen, Riikka; Pönkä, Harri; Kokkinen, Arto; Jalasjoki, Pirkka (2020)
    Bank of Finland Bulletin. Analysis
    The corona pandemic will drive the Finnish economy into recession this year along with the rest of the world. The depth of the recession is so far very difficult to assess, as it is not yet known how the corona pandemic will develop from now on, what measures will be taken to fight the pandemic and what economic policy measures will be put in place to mitigate the effects of the recession.
  • Putkuri, Hanna (2019)
    Bank of Finland. Bulletin 2/2019
    Financial and economic crises have often been preceded by excessive debt accumulation by households.
  • Bank of Finland (2018)
    Bank of Finland. Bulletin 1/2018
    Sweden's economy is performing well. Economic growth is robust and inflation is close to the target level, despite the accommodative stance of monetary policy. Sweden's general government finances are slightly in surplus and government debt is small. In addition, Sweden's current account posts a considerable surplus. Housing prices have been on an upward trend for several years, particularly in Stockholm, Gothenburg and Malmö. Since autumn 2017, housing prices have, however, declined by some 10%. The near-term economic policy challenges include the resolving of structural problems on the housing market.
  • Paavola, Aleksi (2016)
    Bank of Finland Bulletin. Analysis
    Following the financial crisis and the subsequent decrease in economic growth, major central banks have cut interest rates close to zero and introduced non-standard policy measures, such as outright asset purchases, to stimulate the economy. What are the theoretical foundations of these policies and what do we know about their effects on financial asset prices?