Recent Economic and Monetary Trends

The Danish Economy 2008-10

Roskilde Bank

Fixing of Swap Reference Rates

Status of the Faroese Economy, Mid-2008

Niels Bartholdy, Economics

Growth in the Faroese economy is slowing down after a couple of years with a sustained upswing. The dampening of growth has led to a fall in imports after several years of strong import growth, but exports are also declining due to low catches and falling fish prices. Unemployment remains very low and has recently been kept down by employment growth in the public sector.

The First 10 Years of EMU

Niels Bartholdy, Niels Arne Dam and Susanne Hougaard Thamsborg, Economics

This article takes stock of the macroeconomic development and economic inte gration in the euro area since the introduction of the euro in 1999. Economic stability has been successfully achieved, with inflation averaging 2.1 per cent in the period. Growth has been 2.2 pct., and employment has increased by 15 million people. Financial integration and trade have grown, although this is also attributable to other factors than the introduction of the euro. The synchron isation of business cycles has increased, especially for the "core member states" in the euro area, and inflation differentials have diminished.

Real Convergence in the New EU Member States

Paul Lassenius Kramp and Susanne Hougaard Thamsborg, Economics

Over the last 10 years, income per capita in the new EU member states has approached the level in the old EU member states, i.e. there has been real con vergence. At the same time, the new EU member states are experiencing large current-account deficits and stronger inflationary pressures. This develop ment has both cyclical and structural explanations, and the convergence process is also influenced by the choice of exchange-rate regime.

New Principles for Liquidity Risk Management

Jakob Windfeld Lund, Financial Markets

Liquidity risk is a natural part of traditional banking activities. The financial tur moil over the past year has highlighted the need to revise the approach to and supervision of liquidity risk management. This article reviews the new recom mendations and principles in these areas.

Credit Default Swaps

Annemette Skak Jensen, Financial Markets

Among the most widely used and discussed new credit products are credit default swaps. The market for this product has grown substantially in recent years. Developments in the prices of credit default swaps have also attracted much attention. Many analysts use these prices to assess the credit standing of business enterprises and financial institutions.

Growth, Public Finances and Immigration

Erik Haller Pedersen and Johanne Dinesen Riishøj, Economics

Growth in productivity determines the development in the material prosperity of a country. Over the last decade productivity development in Denmark has been weaker than in many comparable countries. In a long-term perspective, offset ting significantly lower productivity growth by higher labour input will not be feasible. For immigrant labour, the participation rate is essential in terms of whether or not these people contribute to prosperity development and fiscal sustainability.

The Chilean Fiscal Rule

Michael Pedersen, Central Bank of Chile

In many countries and several situations, fiscal policy has contributed to creating imbalances, thereby increasing economic instability. A fiscal framework is desir able in order to support sustainable economic development. This article describes Chile's fiscal rule, which has worked successfully as part of the foundation for the favourable course of the Chilean economy in recent years.

Press Releases

Tables and Graphs Section

Vol. XLVII, No. 2