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24-11-2020

Increased uncertainty reduces investment appetite during covid-19

Uncertainty about the future has caused Danish corporations to hold back on investment during the covid-19 outbreak. These are among the conclusions of a new Working Paper in which economists Mikkel Bess, Erik Grenestam, Alessandro Martinello and Jesper Pedersen, Danmarks Nationalbank, have analysed whether uncertainty has an impact on economic activity in Denmark.

03-07-2020

Losses on dollar assets contributed to pressure on the Danish krone

A new publication by Danmarks Nationalbank compares the pressure on the krone during the corona crisis with three earlier periods of krone pressure over the past 12 years. The pressure on the krone in March this year was unusual because it was not impacted by for example speculation about the Danish fixed exchange rate policy. Rather, it was caused by Danish institutional investors selling kroner in response to a decline in the value of their foreign assets.

01-07-2020

New tools for assessing the economy

During the corona crisis, Danmarks Nationalbank has implemented new tools for its ongoing monitoring of the Danish economy. These include models for nowcasting gross domestic product, GDP, growth. Nowcasting models are advanced statistical models that process a wide range of key economic indicators and real-time indicators as they are released. The models include figures for employment, unemployment, inflation, house sales and a number of other key economic indicators as they are released. That way, the models can produce nowcasts of GDP growth for the current quarter.

08-06-2020

Large savings go hand-in-hand with high debt

Pension savings in Denmark have increased sharply since the 1990s. Over the same period, Danish household debt has also risen strongly. On average, a kr. 100 increase in pension wealth leads to a kr. 26 increase in total debt. This is one of the conclusions of a working paper in which economists Andreas Kuchler and Henrik Yde Andersen, Danmarks Nationalbank, and Niels Lynggård Hansen, the European Stability Mechanism (ESM), have analysed extensive data on pension savings and household debt.

10-03-2020

Euro area remains the little brother in transatlantic relations

The euro area economy and its financial sector remains disproportionately more vulnerable to shocks originating from the US than in reverse, as demonstrated in a brand-new international study with data spanning four decades. In an original empirical study, Eddie Gerba from Danmarks Nationalbank and Danilo Leiva-Leon from Banco de España have analysed and compared the interaction between the financial sector and the macroeconomy in the US and the euro area over the past four decades.

04-03-2020

Insurance companies and pension funds continue to invest in unlisted assets

Over recent years, low bond yields and low expected returns on other assets have prompted insurance companies and pension funds (I&P companies) to continue investing more pension savers’ funds in unlisted assets such as wind farms, infrastructure, forestry, unlisted enterprises, private equity funds, properties and alternative types of debt. For the first time, newly developed statistics from Danmarks Nationalbank provide a comprehensive overview of this important development.

27-02-2020

Equity risk premium has increased while interest rates have fallen

Before the financial crisis, investors typically expected an annual return on equities of around 7 per cent, while the return on 10-year treasury bonds was around 4 per cent. Today, the return on 10-year treasury bonds is close to zero, while investors still expect a return of around 7 per cent when investing in equities. The risk premium for investing in the equity market rather than safe assets such as government bonds has thus doubled since the start of the financial crisis more than 10 years ago.

09-01-2020

Homeowners reduce consumption when the non-amortisation period ends

Homeowners’ with interest-only mortgages reduce consumption by an average of 3 per cent of income when amortisation starts if they are unable to roll over their interest-only loans into new ones as they might have expected to do. This corresponds to a reduction in expenditure of kr. 14,000 per homeowner per year. This appears from a Working Paper prepared by Henrik Yde Andersen, Senior Economist, Alessia De Stefani, Research Economist and Stine Ludvig Bech, Senior Economist.