IMF cuts global growth forecasts following Brexit vote. Paul Krugman has taken a different point of view by arguing there is no reason to worry in the immediate future. This opposition reflects clearly two different opinions on the short-term consequences of uncertainty.

European financial markets face a shortage of liquid assets. New regulations increase banks’ demand for liquid securities, mainly sovereign bonds, but the European fiscal rules constrain the supply of public debt. Further, the QE is draining bonds from the market. Some proposed forms of “Eurobonds” or new debt securities issued by European supranational organizations could solve this problem.

The idea that exchange rate volatility could be detrimental to international trade is widely accepted. Surprisingly, macroeconomic evidence on its impact on trade yields either small or insignificant effect on aggregate outcomes. This column suggests that the behavior of big, multi-destination firms help explain this puzzle.

This column evaluates the ECB’s monetary policy stance based on the concept of the “natural rate of interest”. Our estimation results reveal that the ECB’s asset purchase programme seems to be too accommodating since 2015.

The shift from the concept of an “international monetary system” to that of “global financial safety nets” is positive but, still, limited mostly to emergency liquidity assistance. The broader notion of an “international financial public order” including crisis prevention would be more suitable.

Dollar changes impact negatively oil prices most of the times, except when the dollar reaches particularly high levels. During these episodes of high dollar values, the relation between both variables turns positive.

After an eventful year, many questions are raised about trends in the world economy, on which CEPII will aim at shedding light in the coming year.

The U.S. administration insists on the fact that the TPP is ‘enforceable’. If experience of previous US trade agreements is to offer any guidance, this enforceability cannot be taken for granted. Yet the stakes are high for both regional trade rules’ credibility, and for multilateralism’s future.

Georges Sokoloff nous a quittés ce lundi 7 décembre. Avec ce contributeur de toujours aux travaux du CEPII disparaît l’un des meilleurs experts du monde russe et soviétique.

This column reports the nature and the amplitude of economic cycles in the Euro area since 1970, with a focus on the role of financial factors in generating these cycles.