Monetary Policy and the Economy Q4/12

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• Monetary Policy and the Economy Q4/12 (PDF, 2.4 MB) December 2012.

Studies and Analyses

• Austria Prevails in Bleak Environment (PDF, 1.8 MB) Fenz, Schneider. Fenz, Schneider – Monetary Policy and the Economy Q4/12 en Dec 31, 2012, 12:00:00 AM

• The Cross-Border Movement of Euro Banknotes and Austria’s TARGET 2 Liabilities (PDF, 2.2 MB) Handig, Jobst, Schneeberger. Jobst, Handig, Schneeberger – Monetary Policy and the Economy Q4/12 In the public and academic discussion on the payment system TARGET2, the high claims and liabilities of some euro area countries have mostly been associated with the financial crisis. The implicit assumption that TARGET2 balances would be close to zero without the financial crisis is both theoretically and empirically wrong, though. This study looks into the payment mechanisms that have caused the TARGET2 liabilities of the Oesterreichische Nationalbank (OeNB) to rise to a substantial level over the past ten years. The increase can be attributed to a structurally-induced inflow of banknotes to the OeNB, which is partly due to tourism but above all to the physical shipment of euro cash from countries outside monetary union into Austria. This central bank money, which comes to Austria as cash, leaves the country in cashless form, causing an equivalent increase in the OeNB’s TARGET2 liabilities. Structurally induced in- and outflows of central bank money (in cashless form or as banknotes) can be observed in other euro area countries, too. Understanding these flows is essential for a correct interpretation of TARGET2 balances during and after the current crisis. en Austria, EMU, TARGET2, currency abroad, banknote migration, balance of payments, payment system, financial crisis E42, E52, E58, F32, F33 Dec 31, 2012, 12:00:00 AM

• The Use of Payment Instruments in Austria - A Study Based on Survey Data from 1996 to 2011 (PDF, 1.3 MB) Mooslechner, Stix, Wagner. Mooslechner, Stix, Wagner – Monetary Policy and the Economy Q4/12 This study analyzes the results of the OeNB’s methods-of-payment survey of fall 2011 and compares them with the results of similar surveys from the years 1996, 2000 and 2005. The rapid development of cashless payment options in the 15 years that have passed between the first and last analyzed survey and the more widespread availability of payment cards raise the question how consumer behavior has changed. With a value share of some 65% of total payments, cash still remains the most important payment instrument. Debit cards have also risen in importance (to some 25%). While the share of debit card payments doubled between 2000 and 2005, their recent increase was far less significant. The value share of credit cards remains low at 5%. Even though the use of payment instruments varies with education, income and age, in terms of value more than 50% of all payments are still made in cash in each of these sociodemographic subgroups. By contrast, gender and the size of a resident’s home town do not have much impact on the use of cash. The use of payment instruments is determined by two further factors: the size of the payment and the type of the purchase. It is shown that card payments increased markedly in the period from 1996 to 2011 primarily for amounts exceeding EUR 20. Still, cash continues to be used intensively for larger-value payments as well, and it still accounts for a large share of payments in both the food and services sectors, as well as in restaurants and hotels. By international comparison, Austrian payments are shown to be very cash-intensive. The available data suggest that this situation is not solely the result of a low POS terminal density. Rather, this tendency may also be attributable to the fact that Austrian consumers have a positive view of cash. Moreover, a relatively high ATM density and the possibility to withdraw cash free of charge may positively influence the use of cash. On the supply side, the survey results indicate that card acceptance is low for small-value payments. en usage of payment means, payment behavior, retail payments, demand for money, survey data E41, E58, D12 Dec 31, 2012, 12:00:00 AM

• Housing Cost Burden of Austrian Households: Results of a Recent Survey (PDF, 1.4 MB) Beer, Wagner. Beer, Wagner – Monetary Policy and the Economy Q4/12 This article presents the results of a survey carried out in spring 2012 to determine the level of housing costs incurred by Austrian households. The housing cost survey shows that the share of housing costs borne by homeowners (loan repayment plus operating expenses and energy costs) accounts for 25% (median: 19%) of their net household income and is thus far lower than that borne by tenants (rent plus operating expenses and energy costs), which accounts for 34% (median: 29%) of tenants’ income. The burden of housing costs is significant in the lowest income quartile, in particular (tenants: 51% of their net household income, homeowners: 44%). This study compares the results of this survey with those of a comparable survey that was carried out in 2008. The results show that the share of housing costs as a percentage of income increased by 2 to 6 percentage points during the previous four years. The second part of this article analyzes the vulnerability of households. About 6% of households (8% of tenants, 38% of the unemployed and 12% in the lowest income quartile) state that they were in arrears with rent payments or operating expenses in the previous 12 months on at least one occasion owing to financial constraints. Around one-third of tenants are obliged to restrict their consumption to cover their housing costs. en housing, housing costs, housing cost burden, housing finance D14, D31, R21, R31, R38 Dec 31, 2012, 12:00:00 AM

• Financial Markets and Real Economic Activity (PDF, 827 kB) Raunig. Raunig – Monetary Policy and the Economy Q4/12 The current crisis has once more shown that financial markets and the real economy can strongly interact. This experience has sparked renewed interest in research on the linkages between financial markets and real economic activity. On September 28, 2012, the Oesterreichische Nationalbank hosted a workshop on this timely and important topic. This article provides a brief summary of the research that was presented at the workshop. en Dec 31, 2012, 12:00:00 AM