Monetary Policy and the Economy Q3/07

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• Monetary Policy and the Economy Q3/07 (PDF, 1.4 MB) September 2007.

Studies and Analyses

• Robust Economic Activity in the Euro Area (PDF, 214 kB) Breitenfellner, Elsinger, Vondra. Breitenfellner, Elsinger, Vondra – Monetary Policy and the Economy Q3/07 Global economic activity continued to look robust at mid-2007. In the U.S.A., however, it is currently uncertain how large the impact of the August 2007 crisis in the real estate sector on the real economy will be. Strong growth in the second quarter of 2007 was primarily characterized by dynamic net exports but also by a very modest rise in private consumption. The U.S. Federal Reserve System first reacted to short-term liquidity constraints by unexpectedly cutting its discount rate. After having identified risks to growth, it later reduced the federal funds rate and again cut the discount rate. Economic recovery is slowing in Japan............ en global outlook, euro area, central and (south-)eastern Europe, Austria. D12, D14, D91 Sep 30, 2007, 12:00:00 AM

• Economic and Financial Education: Concepts, Goals and Measurement (PDF, 228 kB) Gnan, Silgoner, Weber. Gnan, Silgoner, Weber – Monetary Policy and the Economy Q3/07 A review of the literature and of specific education initiatives reveals a broad range of approaches to economic and financial education. What knowledge areas and skills are targeted and how content is presented very much depends on the motives and goals of the various education providers. Central banks, for instance, provide economic and financial education basically for five reasons: (1) to enhance the effectiveness of monetary policy, (2) to ensure the smooth functioning of financial markets, (3) to support sustainable economic policies, (4) to promote economic and financial literacy as a public good and, (5) by doing so, build their reputation and promote acceptance for their actions. Economic and financial literacy tests have generally uncovered substantial knowledge gaps among citizens. Yet given the methodological deficiencies of the existing analyses, test scores must be interpreted with caution. Improving methodology remains a challenge for future research. en economic and financial literacy, central banks, education. A20, E58, I21 Sep 30, 2007, 12:00:00 AM

• Financial Capability of Austrian Households (PDF, 207 kB) Fessler, Schürz, Wagner, Weber. Fessler, Martin Schürz, Wagner, Weber – Monetary Policy and the Economy Q3/07 Based on a survey by the Oesterreichische Nationalbank (OeNB) in 2004, this paper aims to assess Austrian households’ financial capability with respect to managing money, planning ahead financially, making financial choices and staying informed. People’s attitudes about money often depend on their education, income and age. A higher level of education, income and age tends to go hand in hand with a more positive financial attitude. The OeNB’s survey, however, revealed that, in the case of Austria, there is generally no relationship between a household’s financial behavior and the education level of its members. Moreover, half of the respondents seldom shop around for financial services and are thus not knowledgeable enough to make informed financial decisions. en financial education, financial capability, financial literacy, private households,surveys. D14, D18, D80, E21, G11, G14, G28 Sep 30, 2007, 12:00:00 AM

• Financial and Economic Education Products and Services of Austrian Institutions and Enterprises (PDF, 198 kB) Schlögl. Schlögl – Monetary Policy and the Economy Q3/07 Austrian institutions and enterprises offer a broad range of economic and financial literacy products and services, including online products, brochures, folders, economic simulation games, TV and radio programs, presentations, seminars, company visits and guided tours. On closer inspection, however, it turns out that some areas and target groups remain largely neglected: Education products and services for students attending primary and compulsory school are still scarce, while comprehensive material is available for students and teachers of secondary academic or vocational schools. Moreover, the level of knowledge about certain basic economic and financial concepts was generally found to be low. The deficiencies might be addressed by making the existing products and services more easily accessible in a structured fashion and by broadening the range of products and services to cater to the needs of all target groups. en financial and economic education products/services, austrian institutions/enterprises. A20, I20 Sep 30, 2007, 12:00:00 AM

• Selected Central Banks’ Economic and Financial Literacy Programs (PDF, 387 kB) Fluch. Fluch – Monetary Policy and the Economy Q3/07 This study examines the type and extent of information central banks provide to advance economic literacy in general and financial literacy in particular. Some 30 central banks across the world provide financial education products of varying complexity for different target groups, some in close cooperation with other institutions. Some central banks consider their financial education activities a core competence and give them a prominent role, whereas the “educational visibility” of others is limited. Several central banks have recently launched financial literacy campaigns. Products designed to make people financially knowledgeable are aimed at key target groups, basically children, adolescents, students and teachers. Print products – once the product of choice – have been losing importance. Conversely, central banks use more and more modern knowledge transfer methods, in particular (multilingual) multimedia and e-education packages ranging from online games to multiyear educational programs. Moreover, some central banks have invested heavily in establishing special visitors or training centers, or have pooled knowledge e.g. at money museums. Central banks’ educational Internet resources differ extensively in scope and presentation; only few central banks’ websites provide truly comprehensive and easily accessible information. Financial knowledge transfer appears to work best from simple media and for products that are very strongly focused on individual benefit. en economic education activities, central banks. A20, I20 Sep 30, 2007, 12:00:00 AM

• Human Capital and Economic Growth – Summary of the 35th Economics Conference of the Oesterreichische Nationalbank (PDF, 273 kB) Janger, Raunig. Janger, Raunig – Monetary Policy and the Economy Q3/07 The 35th Economics Conference of the Oesterreichische Nationalbank, which took place on May 21 and 22, 2007, focused on the relationship between human capital and economic development as well as on the question of whether education policy can have a positive impact on this relationship. Good education systems can help step up slow productivity growth in Europe and help countries adjust to structural changes caused by globalization. The 35th Economics Conference followed up on the previous year’s conference, which had explored globalization and the opportunities of economic policy in providing answers to future challenges. At the European level, the biggest need for adjustment was identified in the tertiary education sector, whereas Austria was judged to need reforms of its secondary education system as well. The speakers and panelists of the event included high-level experts of central banks and international organizations, as well as scientists, entrepreneurs, and politicians. en human capital, economic growth, educational policy, financial literacy. J240, O100, O150 Sep 30, 2007, 12:00:00 AM