Economy more productive than you think, says expert

The global economy has experienced an unusual, volatile recovery over the last few years.

If you look at the VIX, you’ll see that market sentiment has fluctuated rapidly over that time period, says Jean Boivin, deputy chief investment strategist for Blackrock Investment Institute. He offered his views on the global economy at a Economic Club of Canada event.

The current level of volatility in markets is due, in part, to the continued crisis in Europe, he adds. Also, to muted growth in China and other emerging markets.

Read: China fears continue to rattle markets

On the upside, Canada ranks highest in performance for productivity out of the G7 countries, he notes. That’s the case even though investors perceive our country’s productivity to be lower.

Read: Canadian economy grew in July

For more from Boivin, check out assistant editor Katie Keir’s live tweets below (and, to follow Katie Keir, click here).

Here are some additional articles on the global economy.

Most client glum on the economy

Correlation high between Canada, emerging markets

Economy shows positive signs despite weakness in energy

10 most economically free countries are…

It’s a recession–Now what?

Live tweets from Economic Club of Canada’s global outlook event

Is the global #economy on the cusp of change?, asks @ECofCanada. Jean Boivin (of BlackRock Investment Institute) will now tell us! #BlackRockglobaloutlook

Nobody can say what might happen, but the global economy is in search of an anchor. #BlackRockglobaloutlook

Many are still looking at Europe and its evolving crisis, and at China and emerging markets, says Boivin #BlackRockglobaloutlook But, as has been China’s approach this year, it will continue to push for domestic growth.

Another puzzle is long-term interest rates; it’s difficult to predict rate trends over next five years, says Boivin. #BlackRockglobaloutlook

But this recovery was supposed to be unusual, says Boivin. Upside is we’ve seen 3rd-longest #bullmarket and strong financial markets.

Over the next 5 to 10 years, indicators such as productivity levels should be key, adds Boivin. And, we need to monitor currency wars and their effect on global growth, trends over the next several years. #BlackRockglobaloutlook

Also consider that there’s more uncertainty and volatility in markets, says Boivin. So prepare clients. For more, read: Markets to exhibit greater volatility: IIAC

Much of today’s global economic strength is due to QE and central bank policies, adds Boivin #BlackRockglobaloutlook But, the problem is there’s too much reliance on and attention paid to monetary policy these days. @ECofCanada

You must consider that the role of central banks is changing in this time of uncertainty, and that’s affecting sentiment #BlackRockglobaloutlook. Boivin suggests that to help markets, central banks need to speak with more conviction. Being overly dovish can show a lack of confidence in the #economy.

Going forward, he adds, it’s key for you and clients to look at hard economic data and to avoid over-reaction, Boivin adds. #BlackRockglobaloutlook

With the easing that has been occurring, for example, you might wonder why inflation hasn’t been exceeding targets? That’s partly due to weak commodities, says Boivin. #BlackRockglobaloutlook

He concludes that being near 0% interest rates isn’t as big an emergency as people may think. It’s still possible to boost the #economy from that position. When the Fed raises rates, it’s important to remember that the move will impact people’s search for yield. So watch that trend. #BlackRockglobaloutlook