15  20  25  30  35  40  45  Change until end-March  Source: Refinitiv. The impact of the conflict on the global prices of energy, food and raw materials is important, and together with sanctions, acts as a drag on global economic growth, notably the economic growth of the euro area – our biggest foreign trade partner.
Researchers have consistently found that, in general, investors direct too much of their savings domestically. Owing to risk aversion, they tend, to their own detriment, to over-discount foreign returns. Such suboptimal allocation of capital lowers living standards everywhere. In their seminal paper twenty years ago, Feldstein and Horioka pointed out that, on net, nations’ 5 savings are generally invested domestically.