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Barbara Jarmulska

Macro Prud Policy&Financial Stability


Macroprudential Policy

Current Position

Senior Financial Stability Expert

Fields of interest

Financial Economics,Public Economics


17 November 2021
Financial Stability Review Issue 2, 2021
In order to assess the strength of the current residential real estate expansion, we compare recent developments in euro area housing markets with the period ahead of the global financial crisis (GFC). We find that house price dynamics, overvaluation and the risk profile of new mortgage loans are at similar levels to those observed during the height of the pre-GFC cycle in 2007. However, vulnerabilities from mortgage lending developments and household balance sheets are currently below their pre-GFC levels. We conclude that the continued build-up of vulnerabilities in residential real estate markets calls for close monitoring and possible macroprudential measures.
JEL Code
R31 : Urban, Rural, Regional, Real Estate, and Transportation Economics→Real Estate Markets, Spatial Production Analysis, and Firm Location→Housing Supply and Markets
G51 : Financial Economics
P34 : Economic Systems→Socialist Institutions and Their Transitions→Financial Economics
G01 : Financial Economics→General→Financial Crises
14 May 2020
This study seeks to answer whether it is possible to design an early warning system framework that can signal the risk of fiscal stress in the near future, and what shape such a system should take. To do so, multiple models based on econometric logit and the random forest models are designed and compared. Using a dataset of 20 annual frequency variables pertaining to 43 advanced and emerging countries during 1992-2018, the results confirm the possibility of obtaining an effective model, which correctly predicts 70-80% of fiscal stress events and tranquil periods. The random forest-based early warning model outperforms logit models. While the random forest model is commonly understood to provide lower interpretability than logit models do, this study employs tools that can be used to provide useful information for understanding what is behind the black-box. These tools can provide information on the most important explanatory variables and on the shape of the relationship between these variables and the outcome classification. Thus, the study contributes to the discussion on the usefulness of machine learning methods in economics.
JEL Code
C40 : Mathematical and Quantitative Methods→Econometric and Statistical Methods: Special Topics→General
C53 : Mathematical and Quantitative Methods→Econometric Modeling→Forecasting and Prediction Methods, Simulation Methods
H63 : Public Economics→National Budget, Deficit, and Debt→Debt, Debt Management, Sovereign Debt
G01 : Financial Economics→General→Financial Crises
29 November 2019
Productivity performance in European countries has been a policy concern for some time. This paper shows that productivity can be enhanced by product market policies which, by increasing competition and efficiency, facilitate higher rates of firms’ entry and exit (i.e., firm churning). Drawing on annual country-sector data for the period 2000-2014 across the EU countries, we find that: (i) competition-enhancing regulation is associated with a higher rate of firm churning; (ii) business churning, in turn, appears to be positively related to higher total factor productivity at the sector level by facilitating the entry of new competitive firms and the exit of less productive ones. Overall, we conclude that stringent product market regulation can be indirectly associated, via its impact on business dynamism, with the somewhat weak productivity performance in a number of EU countries. Thus, our results point towards significant productivity gains that could follow from the introduction of further competition-enhancing measures in product markets.
JEL Code
L51 : Industrial Organization→Regulation and Industrial Policy→Economics of Regulation
P23 : Economic Systems→Socialist Systems and Transitional Economies→Factor and Product Markets, Industry Studies, Population
D21 : Microeconomics→Production and Organizations→Firm Behavior: Theory
D24 : Microeconomics→Production and Organizations→Production, Cost, Capital, Capital, Total Factor, and Multifactor Productivity, Capacity
O40 : Economic Development, Technological Change, and Growth→Economic Growth and Aggregate Productivity→General
20 November 2019
Financial Stability Review Issue 2, 2019
The upswing in euro area commercial real estate (CRE) markets in recent years has reflected, in part, a strong appetite from international investors, including US investment funds. Since 2013 transactions in euro area CRE markets have more than doubled, alongside a 20% increase in prices (15% in real terms) and a decline in average yields from 5.2% to 3.5%. In parallel, the share of transactions by foreign investors increased to 54% in 2018, from an average of 49% in 2013 when a particularly strong pick-up in transaction volumes started. Furthermore, the role of investment funds in foreign transactions increased to 63% in 2018 from 48% in 2013, with around 40% of these on average originating from the United States.