Report
There is now a premium for conservatism in economic policy
In an environment of high risk aversion and drastic reactions by financial markets and capit al flows to bad news (as has been seen in Turkey , Italy , the United Kingdom and emerging countries with external deficits ), a premium has appeared rewarding conservatism in economic policy (no external deficit or fiscal deficit ), as can be seen in Asian emerging countries and the core euro-zone countries. Conservati ve e conomic polic ies are unfortunately associated with lower growth , since investments must be financed with domestic savings and fiscal policy has to be restrictive. W e note that this constraint does not apply to the United States, where economic policies are far from conservative, as long as the dollar remains the dominant reserve currency.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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