All Eco TV Week


Covid-19: from pandemic relief to growth stimulus   4/3/2020
Recent data already give an indication of the huge economic cost of the coronavirus pandemic. This edition discusses the reaction of monetary and fiscal policy which seeks to attenuate the impact. In a second stage, the policy focus will be on boosting demand.

The coronavirus: which role for economic policy?   3/6/2020
The Federal Reserve’s rate cut as well as promise of action by other central banks and finance ministers raise the question of how economic policy can react to the epidemic. The very nature of the shock makes monetary policy at first glance ill-equipped.

Japan: a difficult year ahead in 2020   2/28/2020
Japan experienced a sharp decline of its GDP in the Q4 2019, due to essentially the VAT hike in October 2019. Private consumption, which is structurally a weak component of the Japanese economy, was hardly hit. The Coronavirus crisis could exacerbate these difficulties, through mainly two channels: trade (directly or via value chains) or tourism. Economic relations between China and Japan are tight.

Indonesia: Robust but still insufficient growth   2/21/2020
In 2019, Indonesian economic growth decelerated slightly to 5%. A path of growth close to its potential but still insufficient to increase significantly its GDP per capita. Without large structural reforms, Indonesia will grow old before it gets rich.

The economic consequences of the coronavirus   2/7/2020
The outbreak of the coronavirus is a textbook example of an exogenous shock. It forces a rethink of the scenario for growth for the next months by looking at the demand and the supply side effects.

Pension reform proposal in France: where do things stand?   1/31/2020
With the presentation of the pension reform proposal to the Council of Ministers on 24 January, we thought it would be an opportune moment to provide a progress report and update on some of the changes made in recent months.

Eurozone: macroeconomic outlook for 2020 and potential risks   1/24/2020
The eurozone went through a tough year in 2019. In 2020, the economic growth could stabilise, but a strong rebound seems unlikely.

The US-China trade deal: relief, for now   1/17/2020
The phase 1 trade deal signed between the US and China brings an end, at least for the time being, to several years of rising tensions.

What 2019 tells us about 2020   12/20/2019
The topics which have characterised 2019 are expected to remain very relevant in 2020: slow growth, elevated uncertainty, low inflation, low interest rates.

France – pension reform: the main points of debate   12/6/2019
The reform of the French pension system, currently being elaborated and discussed, is the major project for the second half of Emmanuel Macron’s five-year term. This is a wide and complex subject.

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On the Same Theme

The COVID-19 pandemic and the labour market 4/3/2020
In March, the employment component of the purchasing managers indices for the eurozone declined, whereas in the US, initial jobless claims skyrocketed. Companies need flexibility to manage their cost base but households suffering from an unemployment-related income loss would act as a headwind to the recovery. In the US, the Federal government will top up unemployment benefits, which vary from state to state. In Europe, short-time work schemes allow employers to adapt their workforce without having recourse to costly lay-offs.
COVID-19: Key measures taken by governments and central banks 4/1/2020
Major economic policy responses have been introduced to try to attenuate the impact of the Covid-19 pandemic on the economy. This document reviews the key measures taken by central banks and governments in a large number of countries as well as those taken by international organisations. It includes measures that were introduced through 27 March. It will be updated regularly.
Drop in data confirms need for strong policy reaction 3/27/2020
The measures to stop the spreading of the pandemic have a profound impact on the economy which increasingly shows up in the economic data.Record declines in business sentiment illustrate the necessity of the forceful policy measures which have already been taken.The lifting of the lockdowns will, mechanistically, trigger a rebound in activity but additional stimulus will probably be needed to maintain the momentum.
Faced with a sudden stop, policy switches to a ‘whatever it takes’ mode 3/20/2020
Recent activity and demand data for China show the huge impact of the coronavirus epidemic. German business expectations have seen an unprecedented monthly drop in March . The drop in the price of oil acts as an additional drag on growth and a source of increased credit risk. The strengthening of the dollar is a source of concern for issuers with foreign currency debt in dollar. Despite swift action of the major central banks and the announcement of increasingly important fiscal policy support in various countries, equity markets have barely reacted: lack of visibility dominates.
Addressing the economic consequences of the coronavirus: waiting for the fiscal policy impulse 3/13/2020
Wall Street has entered a bear market, having declined more than 20% from its high. Equity markets globally have seen huge declines this week and corporate bond spreads have widened significantly.Despite the positive news from China, the combination of an uninterrupted international propagation of the coronavirus has dealt a blow to expectations about the growth outlook for the next several months. The oil shock has made matters worse.Central banks have reacted. After the Fed rate cut last week, the Bank of England cut rates as well and the ECB also took several measures to support activity.The instrument of choice at the present juncture is fiscal stimulus of a sufficient size. Both in the US and the eurozone, we are still waiting for this impulse.
The importance of monetary policy in addressing the economic consequences of the coronavirus 3/6/2020
The Federal Reserve created a surprise this week by, quite unusually, going for an inter-meeting cut of the federal funds rate of 50 basis points. At first glance, the very nature of an epidemic makes monetary policy ill-equipped to address the consequences. The drop in demand and the disruption of supply are not related to the level of interest rates. Nevertheless, monetary policy has an important role to play in the current environment by seeking to avoid a deterioration of the financial and monetary conditions. This is a defensive move, the alternative being to run the risk that the tightening of these conditions acts as an additional brake on activity. It seems this has played a role in the decision of the FOMC and it now puts the onus on the ECB to act at its meeting next week.
The coronavirus: putting a number on the economic consequences 2/14/2020
Putting a number on the consequences of the coronavirus is a huge challenge. On some of the topics we have a satisfactory level of visibility of the order of magnitude: international spillover effects of the demand shock, repercussions of the global increase in uncertainty. The visibility is much lower concerning the effects of the supply disruption. This is even more the case for the impact on China. In the near term, data surprises –the difference between the consensus forecast and the outcome- should be higher than normal. However, provided that the peak of the epidemic is reached quickly, visibility should improve quickly and hence support confidence.
Pensions: Working longer for lower benefits 2/12/2020
Population ageing creates major challenges for PAYG retirement systems in the OECD countries. Reforms are needed to their sustainability. These reforms have taken two directions: lower benefits or the extension of the retirement age. Based on current regulations, in most countries, benefits will be less generous for future cohorts. In Poland, replacement rates - the percentage of an individual's latest employment income that is replaced by a pension benefit upon retirement - could be more than halved compared to those retiring now. Another possibility is the lengthening of the normal pension age. Countries that have linked the pension age to life expectancy will be able to maintain benefits at a relatively high level. If duly implemented, normal retirement ages would reach 71 in Italy and the Netherlands and even 74 in Denmark. All in all, in most countries those entering the labour market now cannot expect to receive the level of benefits as those currently retiring. If they want to enjoy higher living standards beyond retirement, they have to increase savings during the years in activity.  
The coronavirus and the profile for global growth in 2020: V, U or L? 2/7/2020
From an economic perspective, the coronavirus epidemic represents a combination of a demand, a supply and an uncertainty shock. The weight of China in world economy, its contribution to global GDP growth and its role in global value chains imply that the international repercussions are more far-reaching than during the SARS crisis in 2003.We have to brace for poor data in February and March, so the real test is whether April sees a pick-up in business surveys. Absence thereof would fuel concerns that the impact is more lasting in nature which would put us in a U-type scenario.  An L-type scenario looks unlikely as yet whereas a V-type recovery would supposes a swift decline in new cases.
The US-China trade deal: few reasons to be cheerful 1/17/2020
The US-China trade deal has brought relief. It avoids new tariff increases by the US with the risk of further escalation. The deal should be welcomed in China, given its ongoing growth slowdown, but also in the US where companies had increasingly expressed their concern about the trade confrontation The rest of the world will monitor closely the extent of trade diversion which could follow from the agreement. Attention will now shift to the phase 2 negotiations, which could very well mean that trade uncertainty will intensify at some stage.

ABOUT US Three teams of economists (OECD countries research, emerging economies and country risk, banking economics) make up BNP Paribas Economic Research Department.
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