William De Vijlder

Group Chief Economist BNP Paribas

A different look

William De Vijlder takes an original approach to economics. Whether through metaphors, comparisons or the analysis of striking financial or economic texts, the economy becomes an inexhaustible source of inspiration and food for thought.


Bitcoin: buyer beware

Based on an overview of the functions of a currency, cryptocurrencies should be considered as an investment instrument, rather than as an alternative to fiat money. Since the start of 2020, correlations between bitcoin and copper, equities and, in particular, breakeven inflation have increased. Probably, investors turn to bitcoin when inflation expectations are on the rise.  Swings in investor sentiment also play a role. The extent of the change in the bitcoin price suggests that speculative waves are at work, driven by momentum buying and extrapolative expectations of price appreciation. When the fundamental value of an instrument like a cryptocurrency is very hard if not impossible to determine and when short-term price changes are a multiple of those observed in equity markets, caution should prevail when building and managing an exposure.  

Read more

Does psychology dominate company fundamentals?

In a recent survey of 469 CFOs of US companies, 84% expect that the US will have entered recession by the first quarter of 2021. This raises the concern of self-realising bearish expectations. A positive correlation between business confidence and company decisions could reflect (anticipations of) strong fundamentals. It could also be due to animal spirits. The role of the latter is confirmed by empirical research by cesifo using data for German companies. In the aggregate, optimistic animal spirits have a bigger impact than pessimistic animal spirits.

Read more

Europe: lower CO2 emissions from energy use

In the European Union, CO2 emissions from fossil fuel combustion declined 2.5% in 2018 compared to the year before. Considering that GDP grew, this implies a reduction in carbon intensity, thereby continuing a long-term trend. The developments in individual countries vary and quite a number of countries have seen an increase in emissions. Likewise, the differences are considerable concerning the emissions per capita depending on the level of economic development, although this is just one factor amongst many which influence the emission intensity.

Read more
green finance

When environmental, trade and social policies meet

The recent “economists’ statement on carbon dividends” offers important policy prescriptions for the US to address global warming. It explicitly refers to the need for a border carbon adjustment system so as to maintain competitiveness versus countries that would not have introduced a carbon tax. The authors recommend that the carbon tax proceeds be equally distributed to US citizens It could be envisaged to use these proceeds in a way which takes into account the distributional aspects of environmental taxes whilst promoting energy efficiency investments.

Read more
financial markets

Drivers of international contagion

High international correlations of markets can reflect the existence of global shocks, global swings in risk aversion or contagion. Contagion can be caused by a wide variety of factors. Taking into account the nature of the contagion is important when assessing its economic consequences.

Read more

Into the maze of trade disputes

The IMF and the OECD have expressed concern about rising trade tensions. At the macro level, tariffs create a lose-lose situation but the sector impact varies a lot. Beyond the direct economic effect, the impact on inflation and financial markets should also be taken into account. The biggest concern is the headwind coming from a structural increase in uncertainty.

Read more

An economist’s playlist

It’s the time of the year for producing lists: the best films of 2015, the best books, the best songs, etc. It is a source of nostalgia and inspiration: For an economist it is tempting indeed to look for links between modern music and economic topics.

Read more

Diary: Week 27 – 2014

Monday 7 July 2014  Paris With Belgium and France having had to leave the football world championship in Brazil, media reports talk of a surge in last-minute holiday bookings: those still taking part in the World Cup don’t count when your team is no longer playing. So losing a game can be bad for economic […]

Read more

Diary: Week 22 – 2014

Monday 2 June 2014  Brussels  I record a video for the retail network of BNP Paribas Fortis in Belgium on the topic of systematic investing. For investors with a medium or longer-term horizon who have money to invest on a more or less frequent basis, systematic investing is very attractive. It’s easy (available cash is […]

Read more

Diary: Week 21 – 2014

Monday 26 May 2014  Prague  Lunch meeting with an important client. A good part of the discussion is on whether there is froth in the markets. With respect to equities, we think earnings will grow sufficiently to justify rising prices in an environment of supportive monetary policy. In the media, credit markets have received even […]

Read more

Diary: Week 20 – 2014

Monday 19 May 2014  Amsterdam In a long brainstorming session with an institutional client we discuss the market environment: The relentless decline in government bond yields: investors like the dovish message from the US Federal Reserve and expect or at least hope for action by the ECB. We don’t share the interpretation that the bond […]

Read more

Diary: Week 19 – 2014

Monday 12 May 2014  Abu Dhabi  I land in Abu Dhabi around 7AM. It’s already comfortably warm. Later in the day it becomes uncomfortably hot (36 degrees Celsius). I have several meetings with investors to discuss the economic and market outlook. I have dinner with a former colleague who now works in the region. There […]

Read more

Diary: Week 18 – 2014

Monday 5 May 2014  Brussels / Paris  In an email exchange with our head of tactical asset allocation, we discuss to what extent markets have surprised so far this year: the euro didn’t weaken, Ukraine hardly had an impact on markets, investors shied away from Japan and bonds have shown an amazingly positive performance. Even […]

Read more

Diary: Week 17 – 2014

Monday 28 April 2014  Brussels  In a client meeting on our asset allocation philosophy and process I emphasise the importance of risk analysis and monitoring from the perspectives of risk factor exposure and stress environments. The former is important because diversification can just be an illusion: equities and high-yield bonds are highly correlated in economic […]

Read more

Diary: Week 16 – 2014

Monday 21 April 2014  Easter Monday  Having been on holiday last week I go through a stack of newspapers. Admittedly, this may reflect a FOMO (fear of missing out) behaviour but on the other hand, news is pivotal in our business. One headline that grabs my attention is from the Financial Times on 9 April: […]

Read more

Diary: Week 9 – 2014

Monday 3 March 2014  London  The developments in Ukraine and in particular Crimea are affecting financial markets along the usual lines: equities are down with Europe underperforming, the euro has weakened against the US dollar, the Swiss franc is a bit stronger, gold and oil are up slightly and bond yields have eased on safe-haven […]

Read more

Diary: Week 13 – 2014

Monday 31 March 2014  Travel to Brasilia  At the gate at Charles de Gaulle airport, there is a pleasant surprise: Air France has its inaugural flight to Brasilia. There’s samba music and dancers. Quite entertaining. I spend a good part of the 10-hour flight reading research papers on how western markets and economic policy influence […]

Read more

Diary: Week 12 – 2014

Monday 24 March 2014  London  At Canary Wharf in the morning for a broad ranging interview with Reuters on the market outlook. In the afternoon, we have our weekly asset allocation meeting. There is an in-depth discussion on the outlook for European high-yield bonds. The asset class has been doing very well and the good […]

Read more