Central banks

FEDS Paper: Declining Search Frictions, Unemployment, and Growth Revisited

10/31/2025 Federal Reserve Central banks

Juan Carlos Córdoba, Anni T. Isojärvi, and Haoran LiThis paper revisits the conditions under which search models generate balanced growth paths (BGPs)—equilibria where unemployment, vacancies, and job flows remain steady as search frictions decline. Martellini and Menzio (2020) claim that such paths exist only when matches are “inspection goods” and match quality follows a Pareto distribution. We show that these conditions are sufficient but not necessary.

FEDS Paper: Do the Rich Really Save More? Answering an Old Question Using the SCF with Direct Measures of Lifetime Earnings and an Expanded Wealth Concept

10/31/2025 Federal Reserve Central banks

Elizabeth Llanes, Jeffrey Thompson, and Alice Henriques VolzThe question of whether affluent households save at a higher rate than other parts of the distribution has been asked by economists on numerous occasions since the 1950s. It is standard in this research to define affluent, or “rich,” households as those with high lifetime earnings or income to better ground the empirical question in relevant theory.

FEDS Paper: Understanding Preferences for Payment Cards using Household Scanner Data

10/31/2025 Federal Reserve Central banks

Marc Rysman, Shuang Wang, and Krzysztof WozniakWe use consumer panel scanner data to examine households' payment choices, a new application of such data. In particular, we study the long-term shift towards payment cards, as well as the role of transaction size in determining choices. We find that idiosyncratic household preferences are a key driver of payment choice.

Human rights, the climate emergency, and the financial system

10/31/2025 European Central Bank Central banks

On 9 April 2024, the European Court of Human Rights (ECtHR) delivered a landmark ruling in Verein KlimaSeniorinnen Schweiz and Others v. Switzerland. The ruling was handed down together with two further rulings in Duarte Agostinho and others v. Portugal and others, and in Carême v. France. The ruling marked the first time the ECtHR held that insufficient climate action by a state constitutes a violation of human rights under the European Convention on Human Rights (ECHR).

Main findings from the ECB’s recent contacts with non-financial companies

10/31/2025 European Central Bank Central banks

This box summarises the findings of recent contacts between ECB staff and representatives of 71 leading non-financial companies operating in the euro area. According to these exchanges, which took place between 29 September and 9 October 2025, business conditions improved slightly in recent months, but they remained consistent with only modest growth in activity, with the manufacturing sector still weighed down by tariffs, uncertainty and challenges to competitiveness. The employment outlook also remained relatively subdued. Price growth continued to moderate.

FPC’s welcoming statement for policy statement (PS) 20/25 – The Strong and Simple Framework: The simplified capital regime for Small Domestic Deposit Takers (SDDTs) – near final

10/28/2025 Bank of England Central banks

The Financial Policy Committee (FPC) welcomes today the Prudential Regulation Authority’s (PRA’s) policy statement 20/25 – The Strong and Simple Framework: The simplified capital regime for Small Domestic Deposit Takers (SDDTs) – near-final.

Fiscal announcements and households’ beliefs: evidence from the euro area

10/20/2025 European Central Bank Central banks

This paper studies the effects of fiscal policy announcements on household expectations. We document announcements of price-related expansionary fiscal measures in response to the cost-of-living crisis in the four largest euro area economies and exploit the exogenous timing of fiscal actions relative to household survey participation to estimate their causal effects. Following fiscal announcements, households revise their beliefs: inflation perceptions rise, and unemployment perceptions fall.

Fiscal announcements and households’ beliefs: evidence from the euro area

10/20/2025 European Central Bank Central banks

This paper studies the effects of fiscal policy announcements on household expectations. We document announcements of price-related expansionary fiscal measures in response to the cost-of-living crisis in the four largest euro area economies and exploit the exogenous timing of fiscal actions relative to household survey participation to estimate their causal effects. Following fiscal announcements, households revise their beliefs: inflation perceptions rise, and unemployment perceptions fall.

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