Recent decades have seen the rate of firm entries and exits decline in the large euro area countries. This could explain the persistent weakness of euro area productivity. As shown in the Bundesbank’s latest Monthly Report, there are cyclical and structural reasons for the weak business dynamism – including demographic change and high levels of bureaucracy. The Bundesbank’s experts demonstrate that improving institutional and regulatory frameworks can help strengthen business dynamics and thus also productivity growth.

An artificial intelligence (AI) application developed by the Bank for International Settlements (BIS) and its project partners, the Bank of Spain, the Deutsche Bundesbank and the European Central Bank, enables analysis of climate-related risks in the financial system.