The sudden collapse of the stock market in China in July has caused great losses for millions of investors. While China has achieved substantial progress in capital account liberalization, the international investment position suggests that the amount of foreign portfolio investment still remains small as capital controls are relatively heavy in the securities and bond markets. In light of this, the spillover effect of the stock crisis from China is limited.
An analysis of the main channels of intergenerational transmission of economic conditions: education, sector of activity and type of occupation, reveal a strong persistence between generations. Between 2000 and 2012 in Italy 51.7% of the children of graduate fathers are themselves graduates; 40% of the children of fathers employed in the public sector are employed in the same sector, and 56.7% of the children of blue collars are themselves blue collars.
During crisis years, Italian banks used costs toprotect profitability, but in 2014 the cost optimisation process came to ahalt. Without extraordinary interventions, cost reduction margins are limitedbecause significant efforts have already been made and because complianceexpenses have increased, and so has the need to invest in business development.
Enduring economic recovery in the medium term will require Italy to increase productivity. Job productivity also depends on the extent to which we succeed in increasing the skills of a population undergoing deep transformations as a result of decline and ageing.
Similarly to the global effects of the Federal Reserve’s purchase program between 2008 and 2014, the Quantitative Easing of the ECB is now driving down interest rates of several countries, not only in the Euro Area.
Political communication is a factor that plays a key role in explaining sovereign spread movements. Based on an econometric analysis in the period 2009-2013, we highlight that under Monti’s administration the effect of fiscal policy announcements had a significant impact on the spread between Italian and German 10-year government bond yields. However, Berlusconi's and Letta's cabinets did not achieve this result, suggesting, among other factors, a possible credibility gap between a technocratic government and the political ones.
A flood of oil and a Chinese economy showing increasingly evident signs of weakness: apart from the effects of currency dynamics, these are the key elements of the present scenario in the global commodity markets. While on the one hand the recovery of the world economy progressively consolidates, on the other the prices (in US dollars) of raw materials are on a deflationary trend.
For Italian manufacturing SMEs, access to financing improves in winter months. Signs of activity are also seen in the area of requests for loans, but a strong recovery is needed to take advantage of the best borrowing opportunities.