Economy

AEEF15 took place on 17-18 October 2018 in Brussels, Belgium. Hosted by Bruegel, it was held in conjunction with the 12th ASEM Summit (ASEM12) on 18-19 October 2018.

The AEEF brought together high-level economists, representatives of ministries and corporate circles to exchange ideas and elaborate on the theme of ''Europe and Asia: Global Partners for Global Challenges'', with a specific focus on monetary and housing policy, international trade and Asia-Europe connectivity.

The aim of the AEEF is to strengthen ASEM wide cooperation and Asia-Europe collaboration in tackling global economic challenges and leadership.

The first session focused on the influence of monetary policy on financial stability, and specifi-cally house prices. The recent rise in the Fed’s interest rates and new provisions by the Chinese central bank on capital requirements are the main monetary policy novelties. At the national level, trends in house prices, the share of the construction sector over GDP and similar indica-tors do not seem to point at a housing bubble within the European Union. The second session kicked off with a review of the current state of financial regulation and stability at the global level, focusing on the two most powerful instruments at our disposal to correct and prevent financial imbalances: monetary policy and macroprudential policy.This was followed by a panel of speakers who discussed international trade from the perspective of Asia-Europe connectivity. In his opening remarks, Yoichi Otabe insisted on the high uncertainty and unprecedented chal-lenges that the multilateral trade system is facing. In our rapidly changing economic situation, new thinking, not mercantilist thinking, is required.

The fourth session was centred on the difficulty of setting up international agreements and organisations, and of operating such that they can maintain credibility in order to deliver efficiently. While discussants agreed that the rise of protectionist governments required a new approach to maintain a multilateral system, few suggestions were made. It has been argued that, for example, the Kyoto Protocol was unsuccessful due to the fact that, albeit many countries ratified the agreement, some major countries’ policies signalled reluc-tance to meet the commitments. These attitudes incentivised other nations to cut down on their commitments. Similarly, the Paris Climate Agreement and the WTO lack instruments to sanction deviations from agreed objectives. As a consequence, individuals, companies and policy makers have few incentives to internalize the suggested policy objectives.

Bruegel has produced 2 podcasts with the Forum's speakers which you can access below:

Japan's Inflation Problem & Monetary Policy Options

The New Balance of Asia-EU-US Trade Relations