Geoeconomics is an increasingly common perspective in analyses of today’s international economic and political landscape. The recent development of geoeconomics stems from the interplay between economic analysis and political science, shining a light on the international political drivers that help explain economic policy decisions. In truth, this has long been a subject of interest for economic historians: in other words, how economic power can be exercised to pursue foreign policy objectives. It is a narrative that can begin with the history of ancient empires, such as Rome, pass through the ...
“Amor, ch'a nullo amato amar perdona.” Throughout the Inferno, many sinners offer justifications or shift the blame onto others, trying to elicit pity from Dante the pilgrim or to rationalize their eternal torment. This tendency highlights Dante’s view that sin is a deliberate act of will, and that trying to escape responsibility is itself part of damnation. Of course, protectionism is not a Dantean sin that leads to eternal damnation, but blaming others in order to avoid correcting one’s own shortcomings remains a source of trouble.
Exporting firms are special firms. Analysis of big data ...
Let’s start with the facts. The incoming German government coalition has reached an agreement to increase public spending by 500 billion euros, easing both formal and cultural constraints on spending, deficits, and debt – particularly with regard to defense. Following the announcement, German bond yields rose. But does this market reaction reflect optimism or concern?
An empirical analysis applied the following method to this specific event: when there is an unexpected economic policy announcement, the market’s verdict can be inferred by observing a set of indicators. The study compares ...
Will President Donald Trump go down in history – again – for opening Pandora’s box in finance? There are at least two reasons to think so: cryptocurrencies and structured finance.
Let’s start with so-called cryptocurrencies. Since Trump returned to the White House, crypto trading volumes have surged. Even back in August, when he was still a candidate, Trump had loudly declared he wanted to make the U.S. “the crypto capital of the world.” And he didn’t stop at words: since last October, Trump and his three sons – skirting basic conflict-of-interest norms – have lent their name ...
In a remake of a film already seen in 2018, President Donald Trump has resumed imposing or threatening to impose tariffs on imports from the United States’ main trading partners. Now, as then, the rationale behind this escalation is twofold. On the one hand, an administration led by a “deal-maker” believes that all trade agreements signed by previous administrations (including his own, as in the case of the 2020 agreement with Canada and Mexico) are, if not disastrous, at least unambitious and therefore need to be renegotiated – preferably through pressure or threats. On the other hand, ...
In the wake of Donald Trump's second term as President of the United States, global attention has turned to the future of the dollar and its implications for the world economy. From a short-term economic analysis perspective, the dollar has appreciated, influenced in part by the tariff policies first announced and later implemented by the newly elected president.
What does this mean for the euro? A depreciation of our currency increases the risk of inflation. This is a scenario that the European Central Bank (ECB) is well aware of, yet it does not seem to be a pressing concern ...
Financially speaking, whether exports exceed imports or vice versa is generally insignificant. Exports represent surplus goods and services that cannot be absorbed domestically and that our trade partners kindly accept in exchange for goods and services we lack. When exports surpass imports, we effectively extend credit to foreign customers; when the reverse happens, we take on debt with them. Sometimes it is better to lend, other times to borrow. As long as debts are eventually settled, exports and imports hold equal importance.
So, why is discussing exports in Italy so important? There are several ...
Every time Wall Street takes a rollercoaster ride, someone inevitably evokes the specter of a viral recession. But should we truly fear such recessions? And what role can the Fed play in mitigating this risk?
First, what are we talking about? Italian Poet Giovanni Pascoli might describe it as something new–yet ancient. The phenomenon of a viral recession can indeed be characterized as a blend of tradition and innovation. The traditional factor lies in the role of sentiments – or beliefs, or perception – introduced into macroeconomic analysis by John Maynard Keynes as early as 1936. Keynes’s ...
European stock markets are thriving, but this is not necessarily a sign of a broader positive trend. In fact, if politicians and bureaucrats fail to act, the Union could lose the historic opportunity to create the European capital market it so desperately needs, especially in light of the challenges posed by the "Three Ds"—deglobalization, demographics with declining birth rates, and decarbonization. Having discussed this since 2015, we have already lost a decade.
Stock exchanges are having a momentous year, with European ones in the front ranks: Paris, Frankfurt, Milan, Amsterdam, with the ...
We tend to think of the global market as a seamless large bazaar where goods from all over the world flow with ease. In reality, it consists of countless bazaars of all sizes, connected by a circular flow of goods. The most important connections are maritime, and they are quite few. For this reason, the attacks on ships off the coast of Yemen raise concerns that may seem exaggerated, considering that very few of these have had significant effects.
To put things in perspective: since the beginning of the conflict between Israel and Hamas last October, the Houthis, a group of Yemeni rebels backed ...
