Webinar: Central Banks and the End of Stability (September 17, 12:00 – 1:00 PM, Central European Summer Time)
Webinar with Spyros Andreopoulos
Spyros Andreopoulos is a macroeconomist who has worked for the European Central Bank, Morgan Stanley, and BNP Paribas. Among other things, he runs the blog Thin Ice Macroeconomics.
- Time: September 18, 12:00 – 1:00 PM, Central European Summer Time
- Online via Zoom, meeting link will be sent
- Presentation and discussion primarily in German
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Highly recommended! „Measuring Geopolitical Fragmentation: Implications for Trade, Financial Flows, and Economic Policy“ by Florencia S. Airaudo, François de Soyres, Keith Richards, and Ana Maria Santacreu.
„Recent geopolitical tensions have revived interest in understanding the economic consequences of geopolitical fragmentation. Using bilateral trade flows, portfolio investment data, and detailed records of economic policy interventions, we revisit widely used geopolitical distance metrics, specifically the ideal point distance (IPD) derived from United Nations General Assembly voting. We document substantial variability in measured fragmentation, driven significantly by methodological choices related to sample periods and vote categories, especially in the wake of Russia’s 2022 invasion of Ukraine. Our results show robust evidence of increasing fragmentation in both trade flows and economic policy interventions among geopolitically distant country pairs, with particularly strong effects observed in strategically important sectors and policy motives. In contrast, financial portfolio allocations exhibit weaker, more heterogeneous, and context-sensitive responses. These findings highlight the critical importance of methodological transparency and careful specification when assessing geopolitical realignments and their implications for international economic relations.“
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Food for thought! „Will Trade Uncertainty Boost Automation?“ by Hamid Firooz, Sylvain Leduc, Zheng Liu, and Deepika Baskar Prabhakar.
„…when trade policy becomes more uncertain, firms in industries that are more exposed to international trade reshore production to a greater extent and automate more than those that are less exposed. This boosts labor productivity but results in little change in employment relative to firms in less exposed industries, likely because automation has both job-creating and job-displacing effects. Given the macro-level evidence that trade policy uncertainty reduces investment and production, our results suggest that automation may mitigate those negative effects for firms that are more dependent on international trade.“
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Super interesting! „Loose monetary policy, dollar depreciation, and debt sustainability: Do not forget Venice“ by Donato Masciandaro, Davide Romelli, and Stefano Ugolini.
„History suggests that using lax monetary policy and a weaker currency to address debt sustainability is a dangerous game. This column revisits a unique early experiment with a managed float of state-issued money in Venice between 1619 and 1666. Newly digitised exchange rate data show that even for a government with a strong fiscal reputation, credibility alone was not enough to preserve currency stability when fiscal and monetary policies lacked time consistency. The Venetian case offers a cautionary lesson for today: reputation cannot indefinitely shield an international currency from the risks of fiscal dominance.“
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Highly recommended! „China’s Economic Transition: Debt, Demography, Deglobalization, and Scenarios for 2035“ by Dinny McMahon and Andrew Polk.
„China’s economy is at a transformational moment. For more than two decades, a growth model centered on the debt-fueled construction of housing and infrastructure propelled the country’s rapid expansion. But it reached its limit in 2021, when housing demand peaked. Beijing is now attempting to pivot toward a new growth model.“ „One of the great questions of our time is how China will emerge from this period of transformation. The goal of this report is to present a clear picture of the economy Beijing wants to build by 2035 and develop potential scenarios for how this might unfold in reality…“
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Super interesting! The Virtual Seminar on Monetary Economics (VSME) – Session 1 with Iván Werning Ivan Werning presented the paper „Tariffs as Cost-Push Shocks: Implications for Optimal Monetary Policy„.
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In case you missed our last Macro Bite (Industrial Production and Value Added), you can read it HERE.
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