Managing Debt Vulnerabilities in Low-Income and Developing Countries

March 22nd, 2018|

By Tao Zhang

March 22, 2018

Congested streets in Dhaka, Bangladesh. In a third of low-income countries, including Bangladesh, government deficits finance investment in much needed infrastructure (photo: Motoya Taguchi/Jiji Press/Newscom).

Government debt in some of the world’s poorest countries is rising to risky levels, a new IMF report shows. The report looks at economic developments and prospects among the world’s low-income countries, which account for a fifth of the world’s population but only four percent of global output. Continue reading “Managing Debt Vulnerabilities in Low-Income and Developing Countries” »

The Economic Scars of Crises and Recessions

March 21st, 2018|

By Valerie Cerra and Sweta C. Saxena

March 21, 2018

New study finds that all types of recessions lead to permanent losses in output and welfare (photo: Peshkov/iStock by GettyImages).

Economic recessions are typically described as short-term periods of negative economic growth. According to the traditional business cycle view, output moves up and down around its long-term upward trend and after a recession, it recovers to its pre-recession trend. Our new study casts doubt on this traditional view and shows that all types of recessions—including those arising from external shocks and small domestic macroeconomic policy mistakes—lead to permanent losses in output and welfare. Continue reading “The Economic Scars of Crises and Recessions” »

Adapting to Climate Change—Three Success Stories

March 20th, 2018|

By Evgenia Pugacheva and Mico Mrkaic

March 20, 2018

When governments subsidize private investment in adaptation, the economic costs of extreme weather events can be reduced (photo: Leolintang/iStock by Getty Images).

Climate change is one of the greatest threats facing our planet. Its negative effects on health, the biosphere, and labor productivity are already being felt throughout the world. Aware of the danger, communities, households, and governments have started taking measures to reduce their exposures and vulnerability to weather shocks and climate change. Our study in the World Economic Outlook shows that public investment in adaptation can partially reduce the economic costs of severe weather events.   Continue reading “Adapting to Climate Change—Three Success Stories” »

A Framework for Currency Unions and IMF Lending

March 16th, 2018|

By Sean Hagan and Hugh Bredenkamp

March 16, 2018

Versions in عربي (Arabic),  中文 (Chinese), Português (Portuguese)

New guidance approved by the IMF represents an important step in how the Fund supports members of currency unions undertaking adjustment (photo: IMF).

Countries benefit in various ways from belonging to a currency union—a group of countries that share a single currency. Businesses can trade and invest across borders more easily. Member countries gain access to larger markets without facing currency risk. And in some circumstances, currency unions can help support their members when they are hit by external shocks. Continue reading “A Framework for Currency Unions and IMF Lending” »

Policy Actions to Sustain Growth and Guard Against Risks

March 15th, 2018|

By Christine Lagarde

March 15, 2018

Versions in عربي (Arabic),  中文 (Chinese), Español (Spanish), Français (French),  日本語 (Japanese), Português (Portuguese)  Русский (Russian)

Even though the sun still shines on the global economy, there are more clouds on the horizon (iStock by GettyImages).

When the Group of Twenty finance ministers and central bank governors met last October, there was a sense of optimism about the global economic upswing and the opportunities for much-needed reforms.

When they meet again in Buenos Aires next week, their focus will be on the policies needed to protect this upswing against downside risks and bolster growth going forward.

The good news is that the growth momentum has continued to strengthen, involving three- quarters of the world economy.

Continue reading “Policy Actions to Sustain Growth and Guard Against Risks” »

Addressing the Dark Side of the Crypto World

March 13th, 2018|

By Christine Lagarde

March 13, 2018

Versions in  عربي (Arabic),  中文 (Chinese), Français (French), 日本語 (Japanese), Português (Portuguese), Русский (Russian)

The same reason crypto-assets like Bitcoin are so appealing is also what makes them dangerous (iStock by GettyImages).

Whether Bitcoin’s value goes up or Bitcoin’s value goes down, people around the world are asking the same question: What exactly is the potential of crypto-assets?

The technology behind these assets—including blockchain—is an exciting advancement that could help revolutionize fields beyond finance. It could, for example, power financial inclusion by providing new, low-cost payment methods to those who lack bank accounts and in the process empower millions in low-income countries. Continue reading “Addressing the Dark Side of the Crypto World” »

Fintech Quiz: How Much Do You Know?

March 12th, 2018|

By IMFBlog

March 12, 2018

Rapid advances in digital technology are transforming the financial services landscape (iStock by Getty Images).

From artificial intelligence to cryptography, rapid advances in digital technology are transforming the financial services landscape, creating opportunities and challenges for consumers, service providers, and regulators alike. This new wave of technology is often called “fintech” and the industry is thriving. Consumers worldwide are using two or more fintech services, sometimes without knowing they are using fintech services. Continue reading “Fintech Quiz: How Much Do You Know?” »

Beware of Strike-it-Rich Euphoria: the Curse of Potential Oil Wealth

March 9th, 2018|

By IMFBlog

March 9, 2018

(photo: Nielubieklonu/iStock).

The resource curse, or paradox of plenty, is when countries with an abundance of natural resources suffer stagnant economic growth or even contraction.

In this podcast, World Bank economist James Cust, says the problem of eradicating extreme poverty is going to be about how resource-rich countries manage their resource wealth. Continue reading “Beware of Strike-it-Rich Euphoria: the Curse of Potential Oil Wealth” »

Welfare Versus GDP: What Makes People Better Off

March 7th, 2018|

By Geoffrey Bannister and Alexandros Mourmouras

March 7, 2018

Oslo, Norway. In rich countries like Norway, that have greater life expectancy, more leisure, and lower inequality, measured well-being is higher than income (photo: iStock by Getty Images).

For years, economists have worked to develop a way of measuring general well-being and comparing it across countries. The main metric has been differences in income or gross domestic product per person. But economists have long known that GDP is an imperfect measure of well-being, counting just the value of goods and services bought and sold in markets.

The challenge is to account for non-market factors such as the value of leisure, health, and home production, such as cleaning, cooking and childcare, as well as the negative byproducts of economic activity, such as pollution and inequality. Continue reading “Welfare Versus GDP: What Makes People Better Off” »

Ending Harassment Helps #TheEconomyToo

March 5th, 2018|

By Christine Lagarde, Corinne Deléchat, and Monique Newiak

March 5, 2018

Versions in عربي (Arabic),  中文 (Chinese), Español (Spanish), Français (French), 日本語 (Japanese), Português (Portuguese)

Women who live in countries with stronger protection against harassment, including at work, are more likely to open a bank account, borrow and save, and use financial services such as mobile payments (iStock by Getty Images).

This International Women’s Day is bringing new calls to #pressforprogress on gender parity. Giving women and girls the opportunity to succeed is not only the right thing to do—it can also transform societies and economies.

Unlocking this transformative potential means pushing for more equal opportunities: for example, equality in legal rights for men and women, and equality in access to education, health, and finance. Just as important is the fundamental issue of ensuring a safe environment for all, including protection against harassment. Continue reading “Ending Harassment Helps #TheEconomyToo” »

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IMFBlog is a forum for the views of the International Monetary Fund (IMF) staff and officials on pressing economic and policy issues of the day.

The views expressed are those of the author(s) and do not necessarily represent the views of the IMF and its Executive Board.

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