, where the trajectory of the exchange rate of the peso has been heavily influenced by news and expectations about nafta ( now usmca ), in some episodes the single most important factor driving the value of our currency. in any case, trade policy shifts remain far from being the main determinant of exchange rates in emes in general. nevertheless, it is also true that their potential to affect eme currencies and other financial variables should not be underestimated. for the already explained reasons, trade - related events can severely distress the economic and financial prospects of emes. furthermore, through its potential impact on inflation, protectionism may accentuate the challenges resulting from the ongoing normalization of monetary policy in a number of advanced economies. more generally, the potential for an increase in protectionism to a level implying systemic risks at the global level is a scenario that cannot be discarded. the exercises carried out by a number of institutions on the impact of higher levels of protectionism depict a grim picture. for instance, recent simulations by the imf2 suggest that, in a high - tariff scenario compounded by adverse confidence effects and tighter financial conditions, the net negative impact on the level of global gdp peaks at about 0. 8 percent below the baseline trajectory in 2020. the accumulated output losses over 2018 - 2023 amount to around 3. 2 percent of world gdp. to have an idea of the order of magnitude of this figure, suffice to say that it compares with the g20 objective of raising these countries ’ collective gdp by 2 percent above baseline over the five years to 2018, and that it is roughly equivalent to the size of germany at present. additionally, it is worth highlighting that, according to these results, none of the considered countries or regions benefits from such a situation, although some lose more than others. 3 notwithstanding the rigor with which these models are devised, we must not forget that they face severe limitations when trying to capture the effects of high levels of uncertainty. furthermore, it is also important to bear in mind see international monetary fund ( 2018 ) : “ global trade tensions ”, scenario box 1 in chapter 1 of world economic outlook, october. additional estimates of the macroeconomic implications of more restrictive trade policy stances can be found in allan gloe dizioli and bjorn van roye ( 2018 ) : “ macroeconomic implications of increasing protectionism ”, ecb economic bulletin issue 6 / 2018, 26 september ; mark carney ( 2018

consumption beyond the us. yan bai's paper looks into a highly complex problem that is very prominent in the current global scenario : the design of optimal trade policies in the context of innovation and technological change. in her model, these policies are endogenous and what it's key is that a country's trade policies may affect a rival's innovation decisions. this paper may provide insights into another relevant issue : the potential evolution of global trade as various economies, especially the us and china, compete for technological prowess, and move further away from free trade in pursuit of this goal. in a paper that may help shed light on the current issue faced by the ecb regarding the interest rate spreads across eurozone government bonds, the paper by juliana salomao considers the impact that changes in the supply of specific bonds may have on their pricing in the context of a particular clientele for them, for example insurance companies and pension funds, which may have country - specific capital requirements. this paper may contain important insights regarding bond liquidity, the regulatory impact on asset demand, and generally how various policies affect sovereign bond pricing. also addressing a prescient issue, gene grossman analyzes the optimality of various policies regarding supply chains in the context of potential disruptions to these chains. his paper considers policies that promote diversification versus those that encourage reshoring, and evaluates the robustness of the conclusions to a generalization beyond ces preferences. these issues are of great relevance given what the pandemic - related shocks showed about the limits to the resilience of global value and supply chains, but also given the continuation of the conflict between the us and china, especially regarding global trade. 3 / 4 bis - central bankers'speeches finally, oleg itskhoki and dmitry mushkin's paper proposes a new framework to analyze monetary and fx intervention policies with a model where purchasing power parity and uncovered interest parity deviations are endogenous. in their framework, monetary policy is tasked with smoothing the output gap, which leads to a volatile nominal exchange rate, and reducing the economy's ability for risk sharing with foreign investors. surprisingly, there exists the possibility of a " divine coincidence " when the optimal real exchange rate is stable, but more generally the ideal policy is a managed peg and does not require capital controls. this is a very daring paper, with potentially deep implications about alternative monetary policy frameworks, especially for emerging economies. this was just a brief description