The transmission channel of rising prices
The high levels of inflation around the world continue to be puzzling. We present here the dynamics of producer prices (PPI) and that of consumer prices (CPI). We have intentionally kept the same scale on the y-axis for comparison between countries. It is interesting to note the strong transmission of production costs to consumers in the United States while it is extremely weak in Japan.
On the European continent, and particularly in the United Kingdom, there is low volatility in consumer prices despite high volatility in producer prices. There is like a damping effect.
The table below quantifies the relationship between the two series. We calculated the correlation by dividing the period into two sub-periods: before 2016 and since 2016. The correlation rose in the United States but collapsed in Japan. Here’s one more conundrum for economists …
Consumers’ payment habits in Europe
The ECB conducted a study on payment habits in Europe in 2019: Study on the Payment Attitudes of Consumers (SPACE); https://www.banque-france.fr/sites/default/files/media/2021/11/25/space_2020-12.pdf. Although the covid crisis has certainly changed these habits, the analysis remains relevant to compare the differences in practices within Europe..
Robinhood – a textbook case of financial analysis
Robinhood was created in 2013 in the San Francisco area, a few miles from Stanford University. It was at this prestigious university that Vlad Tenev and Baiju Bhatt met. Their ambition was strong: to democratize the financial markets by offering easy access to all apprentice traders. Their slogan was quickly found: “Investing for Everyone”. They […]