OeNB Bulletin Q3/25

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• OeNB Bulletin Q3/25 (PDF, 3 MB) October 2025

Studies and Analyses

• Firm entry and exit dynamics in Austria: uncovering the economic significance of insolvencies beyond simple counts (PDF, 849 kB) Elsinger, Fessler, Riedl, Trappl. In Austria, insolvencies are often narrowly perceived as signs of economic distress and are typically tracked through absolute insolvency counts. This paper challenges the informational value of such counts and reframes insolvency within the broader context of firm turnover, emphasizing the functional role of insolvencies in facilitating resource reallocation and structural transformation. Using firm-level data from the Integrated Firm-Level Database (IFLD) of the Oesterreichische Nationalbank (OeNB), we analyze firm dynamics in Austria between 2019 and 2024. We document that insolvencies constitute a small and stable share of firm exits – averaging around 1% of the firm population – even amid post-pandemic normalization. By constructing weighted insolvency rates based on firms’ total assets, employment, and credit exposure, we show that economically significant firms are less likely to become insolvent. We moreover find that insolvency patterns are concentrated in smaller, less systemically relevant segments of the economy. Sectoral breakdowns confirm these patterns and illustrate the added value of disaggregated metrics. Our results expose the limitations of count-based indicators and highlight the importance of improved microdata and more meaningful metrics to inform forward-looking and efficiency-oriented policy frameworks.
  Note that while we cannot update all analyses from the paper to the most recent month, our main finding, namely that the insolvency rate remains stable, continues to hold through the first half of 2025. en insolvencies, resource allocation, firm turnover, business demography, Austria D22, G33, L25, E61, R30 Aug 25, 2025, 12:00:00 AM

• The impact of US tariffs on EU industries: results from a global input-output model (OeNB Bulletin Q3/25) (PDF, 800 kB) Schneider, Sellner. en US tariffs, European industries, trade war, input-output analysis C67, F13, F14 Sep 3, 2025, 12:00:00 AM

• Friend-shoring in migration? Investigating the links between geopolitical fragmentation and global migration (PDF, 498 kB) Raggl, Ramskogler. Is there a migration-equivalent to friend-shoring, a concept often discussed in the context of global trade and capital flows? Does migration increase between countries that are growing geopolitically closer together and decrease between countries that are drifting apart? Our hypothesis is that geopolitical fragmentation increases the cost of migration, and thus migration increases as countries become geopolitical “friends” and decreases as they become “foes,” ceteris paribus. We address this hypothesis empirically with Poisson pseudo-maximum-likelihood estimations of migration gravity models with a full set of fixed effects. We use estimated data on global bilateral migration flows (1990–2020) and a UN-voting-based measure of geopolitical distance between countries. Our findings suggest that increases in geopolitical distance between two countries are indeed associated with lower migration between them. The estimated coefficient exhibits nonlinearities – it is stronger (more negative) for geopolitically close countries than for distant ones – and heterogeneities: it is stronger for migrants from relatively poor origins and for migrants moving to relatively poor destinations. We further find that cultural similarities between countries lower the estimated impact of geopolitical distance on migration. We illustrate the magnitude of the estimated coefficient by assessing how further geopolitical fragmentation could change immigration to the EU and find that possible implications are economically sizable. en international migration, bilateral migration, geopolitical fragmentation F22, F15, F51 Sep 30, 2025, 12:00:00 AM

• Understanding central bank balance sheets: drivers, determinants, and projections of the OeNB’s profits and losses (PDF, 1.6 MB) Kwapil, Meiksner, Stelzer. This paper examines the evolution of the Oesterreichische Nationalbank’s (OeNB) balance sheet and its profit and loss dynamics. Following a decade of unconventional monetary policy, Eurosystem central banks have experienced sustained financial losses in recent years. This study explores the drivers behind these losses. Using a simulation, the paper illustrates the OeNB’s projected balance sheet and net interest income over a 15-year horizon across 32 scenarios, varying assumptions regarding demand for banknotes, excess reserves, and asset yields. The results highlight that the future usage of central bank money (whether in the form of banknotes or the digital euro) is the most influential factor for profitability. The analysis underscores that central bank losses and negative capital are not inherently problematic, provided the institution fulfils its price stability mandate and thereby maintains public trust. The paper concludes that financial strength can support central bank independence, but credibility ultimately hinges on consistent policy performance. en Monetary policy, net interest income, Eurosystem, central bank losses, negative capital E42, E52, E58 Oct 2, 2025, 12:00:00 AM