 I'd like to start with Olivier Blanchard to give us his views on the transatlantic economy in the United States and Europe where we have funny times really for an economist. We have ultra low interest rates, we have full employment in many countries, the U.S. for example, Germany, Japan essentially, and we have almost no inflation. The big question is how can we explain that? Is this going to last? What are governments to do about that? Please Olivier. Thank you for the excessively kind and optimistic remarks. It's a pleasure to be back. I always enjoyed this meeting. I came last year and enjoyed it. I thought that I would focus my remarks on macroeconomics, macroeconomics rather than geopolitics at least in the first round. This reflects comparative advantage or comparative disadvantage with respect to geopolitics. And I would focus on the high-income economies as you indicated because others on the panel are much more competent than me to talk about the rest of the world. I want to focus on what I see as two fundamental forces shaping the economy of advanced economies and by implication the world economy. So the first one really doesn't have much to do with geopolitics of global and it is the advent of extremely low interest rates. Now that's much more than a technical issue. I think it's really a regime change which is going to have profound implications for policy and the way policy is made in the next decade or so. Now the first thing to say is interest rates are amazingly low. As you know the yield curve, the structure of interest rates looking forward for the eurozone is negative up to 25 years, which has never been seen. Very similar in Japan, not very far from this in the US, so this is a global phenomenon. And there is every indication that it's going to stay. Some people say well tomorrow morning rates will go up again. But if you look, this is really something which started in the mid-80s and has basically steadily taken place over time and the factors behind are probably there to stay. So I think we have to think of the world in which we're going to be exposed to very low interest rates. Now why is this important beyond macroeconomics, beyond just the narrow aspect? It is because it has implications for monetary and fiscal policy. It basically says that monetary policy has been the instrument that governments have used over the last 40, 50 years to try to direct the economy, make it operated for employment or something close. And we've come to the end of what monetary policy can do. You see it in the discussions that took place in the eurozone two weeks ago. There's an increasing notion that we've done everything we can. And therefore monetary policy cannot be used. So the main instrument that governments have had to basically counter fluctuations is really not operative. And so the implication is, well, what else do we have? Unfortunately, the answer is what makes things really bad for monetary policy makes things really good for fiscal policy, which is that the cost of borrowing is very low, the cost of deficits, the economic cost of deficits is very low. And so there's more space. But the big issue is that from a policy point of view, monetary policy and fiscal policy are conducted in very different ways. The second process is much more political, much more complex. And I think that the issue we're going to face is whether fiscal policy is going to be used right. And there's a risk that it is not. I'm looking at you, not at you as such, but you as a German, to think that there may well be an issue. And I think that in thinking about what could happen if we have adverse shocks and things like this, this is really first order. This is not the only implication of low rates. It has implications for inequality, for example. And if you're a saver and you rely on bonds as your income, you're in trouble. And this has political implications. So that was the first force. I put it on, you know, it's not related to China, although China has played a role in the low rates. But I think it's really something we have to think about. So the second one, the second force that I want to talk about, is this nexus between inequality, populism, protectionism, which gets us closer to issues related to China. The facts on inequality are really striking. And inequality measured all kinds of ways, really has decreased until the 1980s in most advanced economies. And it has turned around to different degrees. Maybe U.S. obscenely so. In France, actually, not very much. But the perception of people is that inequality matters a lot. And therefore, even in France, it is a major issue. And this is going to bring a number of pushbacks, reactions, which may be tractable or may be intractable. It's going to lead to a pushback in terms of capital taxation. I think we have to be ready for a world in which wealth is going to be taxed more heavily, in which corporations are going to be taxed more heavily. This may happen smoothly. This may not. The OECD just came out with a plan to have corporate taxation organized at the world, at the global level. And I think that's progress. But I think this is going to be a big challenge. Capital is not going to have it easy. And that has both economic and political implications. The one that I want to focus on and finish my remarks with is the protectionism aspect, the trade wars, which is clearly not triggered only by inequality, but is part of a general reaction against the way things have been running. And here I want to make a number of points. The first one is the mechanical effects of tariffs. It's actually from a macroeconomic point of view, not a big deal. When we crank our models and we put tariffs in, well, you have changes in relative prices, but they don't do a whole lot. And the reason is for a typical country, exports go down, but imports go down as well, which means more of it comes from domestic production. So you have fine demand which decreases, domestic demand which increases. Reallocation is a bit tough, but you don't get big effects. So if this was the only... We had agreed, basically, to put tariffs once and for all. I would not like it, but it would not be the end of the world. We would not create a recession. What is much more worrisome in the short run is the induced effect on investment, which, and that comes not so much from the tariffs, but from the uncertainty which has come with the trade wars, with international relations. Because if you do not know whether there's going to be a tariff on country X or on good Y, you basically wait. Now, from your point of view, waiting three months or six months is not a big issue. But when, you know, many firms do this, you can have a collapse of investment due to the option value of waiting, and that can be very costly. And that's what we're starting to see, to different degrees. We've seen it. It took a while to happen in the U.K. with Brexit, but it's happening. Basically, firms are just waiting, waiting for the next elections in the U.S., waiting for various things. So this is really the, in the short run, the thing which worries me. In the long run, there are big effects. And basically, we're seeing global trade decrease, and that really, what we're seeing is de-globalization in effect. Not only because of that, not only because of tariffs, but security issues. You may not want to import fridges or refrigerators if they have some embedded component which allows some foreign country to actually know what is in your fridge. So we may see a drastic decrease in trade. Carbon tax is not going to help. It becomes costly to actually have goods travel large distances. Political uncertainty may make you want to deal with supplies in countries close to you, rather than in Asia, for example. I think all this may well happen. And this has major implications. For the short run, not sure. I'll finish with what people always ask me, which is, well, are we going to have a recession? And I think that I've given my answer to it, which is we're probably going to get an effect on investment, which then may lead to pessimism and consumption going down. So it could happen. In the case of the U.S., I do not think so because we have an administration who seems quite indifferent to spending. And therefore, if needed, my guess is that they'll do the wrong thing, but for the right purposes in this case, you will see a fiscal expansion. I'm much more worried about Europe, where fiscal has many more strings attached and I'm not sure that they'll do the right thing. So my guess is probably not a slowdown, probably a slowdown, probably not a recession. But again, I want a footnote. It could happen if things get worse. I'll stop there. Thank you very much. Talking about Germany, we believe at the Kiel Institute that we are in a recession. The third quarter in Germany had negative growth, the second quarter too. So technically speaking, we're in a recession in Germany already and that, of course, drag is a drag on the entire eurozone and EU economies. I've seen Naoki Tanaka who wants to jump in and why not I have my order, but I'm flexible and think how eager you are to comment. Please, go ahead. May I continue the ineffectiveness of monetary policy which presented by Professor Bransher. So the Japanification of monetary phenomena are now spreading in the world, in Europe and North America. So when we see the negative interest rate, I think John Hicks mentioned about almost zero natural rate of interest. So he, Mr. John Hicks mentioned the bad harvest in Ireland in 19th century. At that time, farmers didn't want to borrow money in order to seed, in order to sow seeds. So that's the phenomena of natural interest rate is almost zero. At that time, monetary policy will not work. So these are the situations we are now observing. So in this situation, fiscal expenditure will be very important if we face very deep recession. In the case of Japan, from this month, our government raised consumption rate, consumption tax rate in order to face the next very difficult situation. So in the very near future, monetary policy will not work in developed countries. So another measure should be considered if we have to face the very difficult situation in the management of the demand. That's my understanding. Thank you, Okie. I think there is quite some consensus here, at least amongst the two of you that fiscal policy has more to do, certainly in Europe.