TORINO (ITALPRESS) – “It is not surprising that in the United States long-term interest rates are increasing. Long-term world rates are influenced more by financial activity in dollars than in other currencies, when the long-term interest rate increases in the US we see a tracimation from the US to other markets. This has hit the European market, rates have increased less in Germany, a little more from us and in France. The problem is that this increase in US rates is facing an economy growing, while in Europe the economy grows less and the impact of this rise in rates is higher, it is something that weighs on growth.” Thus the governor of the Bank of Italy, Fabio Panetta, at the International Festival of Economy in Turin.
“It’s not possible for me. If we look at world financial activity, the dollar represents about two-thirds of the total. When Trump’s announcement of tariffs was made, the dollar depreciated and the US government bond rates increased. This phase, however, lasted little for a number of reasons. The first is that there are no alternatives: the capitalization of US stocks is about twice that of all the stocks of all other advanced countries”, Panetta explained on the possible sunset of the dollar as a currency at the center of the world financial system.
“The increasing spread of artificial intelligence is leading to an improvement in economic conditions, because the production chain is located in different countries such as the United States, China, Korea, Taiwan, Japan, and also in Europe, so it has given rise to international trade. Exports, imports and world demand have grown. The expectations of profitability of these large companies operating in the artificial intelligence industry have made the stock exchange prices grow significantly. It is generated what is called ‘wealth effect’: the saver having a growth of titles in the wallet feels richer, has a higher expected permanent income and is led to consume more. At the same time for companies there is a reduction in the cost of capital that is generating an increase in world demand and aggregate demand in various countries. Today world growth has been higher than expected months ago,” he added.
“The difference between the United States and Europe lies in the advanced and technological sectors, where productivity has grown more than in other sectors of the economy. The revolution of ICT technology in the 1990s was adopted very quickly in the US, on average in Europe much slower. This created the conditions to create a persistent gap. Italy has lost a very important appointment with the technological shock that has increased productivity. Now we have the opportunity of artificial intelligence, where we are back in the production of technologies, but what matters for productivity is the use of AI and there the challenge is still open. Today those who do not understand and do not know technology, can not deal in a conscious way neither economics nor finance,” he concluded.
– Photo Ipa Agency –
(ITALPRESS).
