The latest edition of the IMF's World Economic Outlook provides an update for the short and long term. Short-term growth prospects are still hampered by the continued burden of high inflation and the consequences of the invasion of Ukraine triggering wider geopolitical tensions and supply-chain disruptions. More recently, questions have emerged - at least in some countries - about financial stability. Growth may also be affected by the increasing fragmentation of the global economy. The IMF studies in depth the consequences of the growing concentration of foreign direct investment along geopolitical lines, which could affect more directly emerging and developing economies. Discussion with Mehdi Benatiya Andaloussi and Andrea F. Presbitero, economists at the IMF and co-authors of the World Economic Outlook 2023, Jérôme Héricourt, Scientific Advisor, Macroeconomics and International Finance Program, CEPII, and Antoine Bouët, Director, CEPII.

Rules of origin are a common feature of regional trade agreements that fall short of full custom unions. Two of the most important trade agreements, the North American Free Trade Agreement (NAFTA) and the European Union (EU), recently enacted major changes to those rules. The 2020 USMCA agreement replacing NAFTA made those rules much stricter. Meanwhile, following its exit from the EU customs union, Britain and the remaining EU27 had to draw up new rules of origin for the EU-UK Trade and Cooperation Agreement (TCA). This paper quantifies the main trade-offs involved in setting the strictness of rules of origin in the context of the automobile industry. A more stringent agreement can raise or lower regional parts production, but it inevitably raises prices. By Keith Head, Thierry Mayer and Marc Melitz