The euro area, for example, has only modest trade links to the United States (minimizing the direct trade spillover from the United States), has benefited from a depreciation of the euro (further mitigating any trade effect), has a relatively modest market capitalization to GDP (minimizing either the spillover from the U.S. equity market correction or the effect of the global equity correction), and has a relatively modest share of high-tech production to GDP (minimizing the effect from the global retrenchment in high-tech investment).
Nevertheless, while these channels have muted the slowdown in the euro area, they have not eliminated it. Now let me turn to the risks. The greatest risk, in my view, would arise from a sharper-than-expected slowdown in the United States – either an outright recession or a more persistent period of very low growth.