Central banks run out of ammunition?
It is time to take stock of the President of the European Central Bank. The handling over Mario Draghi’s baton to Christine Lagarde will not be an easy job. With its urgent appeals to governments to activate fiscal stimulus, the ECB is showing its limitation in boosting growth. Has Europe fallen into a liquidity trap? The evidence shows that the Old Continent is seriously flirting with the danger of “Japanization”. Whereas the recession threat is serious in Europe, it is fortunately not on the agenda in the United States and in emerging countries. But the fate of the global economy and markets remains closely tied to the specter of the trade war.