What share of public services employment is contributed by the private sector?

This box examines the composition of “public services” employment in the euro area. This sector has contributed disproportionately to aggregate employment growth in recent years. Drawing on the ECB Consumer Expectations Survey and Eurostat’s EU Labour Force Survey, we show that only around half of the 6.9 million public services jobs created since 2008 can be attributed to the public sector. Within public services, health and social work is the dominant driver, yet this is also the least “publicly provided” sub-sector.

Narratives and risks: a quantitative toolkit to evaluate scenarios applied to the Middle East conflict

This box introduces a new quantitative methodology to evaluate alternative scenarios around the Eurosystem/ECB staff baseline projections, with a focus on their empirical plausibility. In a first step, the methodology constructs joint predictive distributions capturing temporal and cross-variable dynamics for euro area real GDP growth and HICP inflation. It then assesses the empirical plausibility of scenario outcomes by computing the likelihood of each scenario relative to that of the baseline against historical patterns.

Artificial intelligence and European firms: the cost of market-based financing

This box examines how exposure to artificial intelligence (AI) is reflected in the market-based financing conditions of European firms. Using a novel firm-level measure of AI exposure derived from the earnings call transcripts of STOXX Europe 600 constituents, we show that AI exposure extends beyond a narrow set of infrastructure providers and hyperscalers, encompassing a broader range of firms that adopt AI for product innovation or productivity gains.

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