Structural Reforms Give Biggest Help To Lagging Countries
By Angana Banerji and Christian Ebeke
September 22, 2017
Structural reforms can jumpstart productivity in countries with weaker initial productivity, and help them catch up with their peers (photo: The Palmer/iStock).
Labor and product market reforms, which make economies more efficient, can benefit all countries. But they are especially helpful in jumpstarting productivity in countries where productivity is weaker. This is good news as it implies that reforms are one route through which countries with lower per capita incomes can catch up with richer countries instead of persistently lagging behind: economic hardship is not destiny. Our new paper provides fresh arguments in favor of the often-difficult structural reforms. Continue reading “Structural Reforms Give Biggest Help To Lagging Countries” »
Corruption in Latin America: Taking Stock
By David Lipton, Alejandro Werner, Carlos Gonçalves
September 21, 2017
Versions in Español (Spanish) Português (Portuguese)
Systemic corruption drains public resources and drags down economic growth (photo: People Images/iStock).
Corruption continues to make headlines in Latin America. From a scheme to shelter assets leaked by documents in Panama, to the Petrobras and Odebrecht scandals that have spread beyond Brazil, to eight former Mexican state governors facing charges or being convicted, the region has seen its share of economic and political fallout from corruption. Latin Americans are showing increasing signs of discontent and demanding that their governments tackle corruption more aggressively.
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Growth That Reaches Everyone: Facts, Factors, Tools
By Rupa Duttagupta, Stefania Fabrizio, Davide Furceri, and Sweta Saxena
September 20, 2017
Versions in Русский (Russian)
People lining up in front of a charity house in São Paulo, Brazil: Over 200 million people around the world are unemployed, despite overall economic growth (photo: Paulo Whitaker/Reuters/Newscom)
Economic growth provides the basis for overcoming poverty and lifting living standards. But for growth to be sustained and inclusive, its benefits must reach all people.
While strong economic growth is necessary for economic development, it is not always sufficient.
Over the past few decades, growth has raised living standards and provided job opportunities, lifting millions out of extreme poverty. But, we have also seen a flip side. Inequality has risen in several advanced economies and remains stubbornly high in many that are still developing. Continue reading “Growth That Reaches Everyone: Facts, Factors, Tools” »
Chart of the Week: Banking on Women—A Case for More
By IMFBlog
September 19, 2017
Versions in 中文 (Chinese), Español (Spanish), 語 (Japanese), Русский (Russian)
Worldwide, women hold less than 20 percent of board seats of banks and banking supervision agencies. More women on bank boards may have a positive effect on bank stability (photo: istocksdaily/iStock by Getty Images)
The “glass ceiling” in finance has barely cracked. Compared to the available talent pool, there is still a large gap between the representation of men and women in leadership positions in banks and bank supervision agencies worldwide.
A recent IMF staff paper provides a comprehensive dataset on banking sector characteristics and performance, as well as on the share of women on the boards of directors and banking supervision agency boards, covering 72 countries over 13 years. Continue reading “Chart of the Week: Banking on Women—A Case for More” »
Drifting Apart: Income Convergence in the Euro Area
A souvenir shop in Lisbon, Portugal: Income convergence in the euro area has slowed (Photo: Rafael Marchante/REUTERS/Newscom)
By Jeffrey Franks and Hanni Schölermann
September 13, 2017
Versions in Español (Spanish), 語 (Japanese)
The experience of recent decades has challenged the prediction that the single currency would help differences in income levels across euro area countries narrow over time. This income convergence among the founding countries of the euro has not happened, prompting a need for further economic reforms. While newer members of the euro have converged, even this trend has stalled since the crisis.
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End of the Oil Age: Not Whether But When
By Reda Cherif, Fuad Hasanov, and Aasim M. Husain
September 12, 2017
Versions in ربي (Arabic), 中文 (Chinese), Español (Spanish), Русский (Russian)
Filling up at a gas station in California: demand for oil could plummet with the rise of renewable energy (Xinhua/Newscom)
A transportation revolution is underway that could completely transform the oil market in the coming decades. Continue reading “End of the Oil Age: Not Whether But When” »
Back-to-School Blogs
By IMFBlog
September 5, 2017
Back to school in Paris, France: get caught up on our top blogs you may have missed over the summer (photo: LAURENT CHAMUSSY/SIPA/Newscom)
What a summer it’s been. To help you get a handle on all that has happened in the global economy, our editors have compiled a handy primer of our blogs published over the summer months. Continue reading “Back-to-School Blogs” »
The Benefits and Costs of a U.S. Tax Cut
By Sandra Lizarazo, Adrian Peralta-Alva, and Damien Puy
September 1, 2017
Versions in Español (Spanish)
A recent IMF paper looks at the effects of lowering personal income tax rates on income distribution and the U.S. economy (photo: Ingram Publishing/Newscom)
U.S. lawmakers getting ready to rewrite the nation’s tax code have a fundamental question to answer: What are the priorities for tax reform? Do you want faster growth? Less income inequality? A tax cut that doesn’t increase the budget deficit? In a recent working paper, we find that, depending on how a tax cut is targeted, it is possible to make some progress toward the first two objectives. Personal income tax cuts can help support growth and, if well targeted, can also help improve income distribution. However, we find that lowering personal income tax rates does not raise growth enough to offset the revenue loss that is caused by the tax cut itself. Continue reading “The Benefits and Costs of a U.S. Tax Cut” »
Global Cooperation—An Uphill Battle: Finance & Development magazine
August 30, 2017
As access to information burgeons, experts are more crucial than ever.
This issue of F&D looks at what is arguably the clearest challenge the world faces: how to address complex global problems amid growing skepticism about the benefits of multilateralism and continued global integration.
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More Action Needed on European Bank Profitability
By John Caparusso, Rohit Goel and Will Kerry
August 30, 2017
Versions in Español (Spanish), Deutsche (German), Français (French)
A woman withdraws money from an automated teller machine in Italy: Some European banks have too many branches relative to assets (photo: Martin Moxter imageBROKER/Newscom)
European banking has made considerable progress in the past few years: Banks have built up capital, regulation is stronger and supervision has been enhanced. But profitability remains weak, posing risks for financial stability.
In a sample of more than 170 large European lenders with combined assets of $35 trillion, roughly half generated a weak return on equity in 2016, and banks representing only 15 percent of assets generated a healthy return on equity, defined as more than 10 percent. Weak profitability is also shown in a low return on assets for domestic banks in many European countries. The drivers of these weak returns reflect varying combinations of low income, high costs, or provisions needed to build buffers against non-performing assets.
Continue reading “More Action Needed on European Bank Profitability” »
