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The CEPII Newsletter       
May 2019        

The French edition is slightly different as it also includes material available in French only  

Europe Monnaie & Finance Trade & Globalization Migrations Economic Policy Emerging Economies Competitivness & Growth Environment & Natural Ressources

Trade wars and global value chains: Shooting oneself in the foot

Since the beginning of 2018, the US administration has implemented several measures limiting trade with its partners, in particular China (Bown and Kolb 2019). A new series of measures targeting $11 billion of EU exports was announced on 8 April 2019, but it has not been implemented as the WTO arbitration is still pending. This has fuelled retaliation and has resulted in high trade tensions at the global level. The 60% trade war optimal tariff obtained by Ossa (2014) has indeed not been reached yet, but the shared losses for all the countries entering into the current war are worth investigating. 
Column first published in VOX.
Cecilia Bellora, Lionel Fontagné


Addressing macroeconomic imbalances within the euro area: still a long road ahead

The shock caused by the 2007-08 financial collapse, followed by the European sovereign debt crisis, has raised new doubts about the ability of the single currency to work well in a region with huge economic and political diversity. It has also given a new dimension to this debate by highlighting the building-up of unsustainable macroeconomic imbalances within the European Monetary Union (EMU).
The architects of the euro area counted on the monetary union to facilitate balance-of-payments adjustments by encouraging imbalances mainly driven by productivity differentials and catching-up developments. In short, there were widespread expectations that the removal of exchange-rate risks and the increased financial integration would play an important role in the adjustment process.
Although the Eurozone, a monetary union based on a single currency, is supposed to be immune from unstainable disequilibria characteristic to fixed-exchange rate regimes, it is now well established that macroeconomic imbalances initially considered as “good imbalances” turned out to be “bad imbalances”.
Virginie Coudert, Cécile Couharde, Carl Grekou, Valérie Mignon



The "new silk roads": an evaluation essay
(3/4): China as a global player in globalization

A review of China's international activity since 2013 is striking first of all by the speed with which it has made China a major player in globalization in terms of both direct investment and lending to developing countries. The Silk Roads project, which is a unique and unconventional project, appears above all as a means of gradually structuring the Chinese vision of globalization, which combines China's long-term economic and strategic interest.
Michel Fouquin, Jean-Raphaël Chaponnière


ISSN: 1255-7072
Editorial Director : Antoine Bouët
Managing Editor : Dominique Pianelli