The Wealth of Nations: Governments Can Better Manage What They Own and Owe

By Vitor Gaspar, Jason Harris, and Alexander Tieman

October 10, 2018

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A firefighter in Auckland, New Zealand: when governments know what they own they can put their assets to better use and can earn about 3 percent of GDP more in revenues to spend on citizens’ well being (Photo: Rafael Ben-Ari/Newscom)

What is the state of your personal finances? You probably think first about your debts: your mortgage, your credit card balance, and your student loans. But you probably also think about how much cash is sitting in the bank, the value of your house, and the rest of your nest egg.

Surprisingly, most governments do not approach their finances this way. Continue reading “The Wealth of Nations: Governments Can Better Manage What They Own and Owe” »

The Financial System Is Stronger, but New Vulnerabilities Have Emerged in the Decade Since the Crisis

By Tobias Adrian

October 10, 2018

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Debt owed by governments, companies and households in economies with globally systemically important financial sectors has risen since the global financial crisis (Photo: Richard B. Levine/Newscom)

Although the global expansion has plateaued, easy monetary policies continue to support growth. But we shouldn’t rest too easily. Chapter 1 of the latest Global Financial Stability Report finds that short-term risks to the financial system have increased somewhat over the past six months. Continue reading “The Financial System Is Stronger, but New Vulnerabilities Have Emerged in the Decade Since the Crisis” »

Global Growth Plateaus as Economic Risks Materialize

By Maurice Obstfeld

October 9, 2018

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Uncertainty over trade policy is becoming a drag on economic activity (photo: Imagine China/Newscom)

The latest World Economic Outlook report projects that global growth will remain steady over 2018–19 at last year’s rate of 3.7 percent. This growth exceeds that achieved in any of the years between 2012 and 2016. It occurs as many economies have reached or are nearing full employment and as earlier deflationary fears have dissipated. Thus, policymakers still have an excellent opportunity to build resilience and implement growth-enhancing reforms.

Continue reading “Global Growth Plateaus as Economic Risks Materialize” »

Lasting Effects: The Global Economic Recovery 10 Years After the Crisis

By Wenjie Chen, Mico Mrkaic, and Malhar Nabar

October 3, 2018

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Woman cleaning in Berlin, Germany: the 2008 global financial crisis has had long-lasting effects on economic growth (photo: Caro/Olaf Jandke/Newscom)

In the year following the 2008 financial crisis, economic activity declined in half of all countries in the world. Our analysis in Chapter 2 of the October World Economic Outlook shows that in many countries output is still well below levels that would have prevailed had output followed its precrisis trend. Continue reading “Lasting Effects: The Global Economic Recovery 10 Years After the Crisis” »

A Decade After Lehman, the Financial System Is Safer. Now We Must Avoid Reform Fatigue

By Adolfo Barajas, Claudio Raddatz, and James P. Walsh

October 3, 2018

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A ticker in New York’s Times Square flashes the news of the collapse of Lehman Brothers on September 15, 2008: In the decade since, the financial sector has  strengthened considerably, but the reform agenda remains incomplete (Photo: Joshua Lott/Reuters/Newscom)

In the decade since the collapse of US investment bank Lehman Brothers sparked the most severe economic crisis since the Great Depression, regulation and supervision of the financial sector have been strengthened considerably. This has reduced the risk of another crisis, with all its attendant woes—unemployment, foreclosures, bankruptcies. But a new risk has emerged: reform fatigue. Continue reading “A Decade After Lehman, the Financial System Is Safer. Now We Must Avoid Reform Fatigue” »

Central Bank Credibility Pays Off in Times of Stress

By Rudolfs Bems, Francesca Caselli, Francesco Grigoli, Bertrand Gruss, and Weicheng Lian

October 3, 2018

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Shopping center in Warsaw, Poland: emerging market economies have been able to bring down inflation to a low level (photo: Caro/Bastian/Newscom)

Since the mid-2000s, inflation in emerging market economies has been remarkably low and stable, in sharp contrast to the 1990s. Continue reading “Central Bank Credibility Pays Off in Times of Stress” »

By | October 3rd, 2018|Advanced Economies, Annual Meetings, banking, Emerging Markets, monetary policy|

Give Today’s Children a Chance

By  Christine Lagarde and Vitor Gaspar

September 24, 2018

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Children in early childhood education in Indonesia: more money put into education helps countries achieve their Sustainable Development Goals (Photo: Ajun-Ally/Pacific Press/Newscom)

World leaders are gathering at the United Nations to discuss how to deliver on development for all that is economically, socially, and environmentally sustainable—“The 2030 Agenda for Sustainable Development,” and its 17 Sustainable Development Goals (SDGs). Continue reading “Give Today’s Children a Chance” »

Risky Business: Reading Credit Flows for Crisis Signals

By Claudio Raddatz Kiefer and Jérôme Vandenbussche 

April 10, 2018

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

The odds of a severe economic downturn are higher when a growing portion of credit flows to riskier firms, according to a new IMF study (Photo: Pali 137/ iStock by Getty Images).

Supervisors who monitor the health of the financial system know that a rapid buildup of debt during an economic boom can spell trouble down the road. That is why they keep a close eye on the overall volume of credit in the economy. When companies go on a borrowing spree, supervisors and regulators may decide to put the brakes on credit growth.

Trouble is, measuring credit volume overlooks an important question: how much of that additional money flows to riskier companies – which are more likely to default in times of trouble—compared with more creditworthy firms? The IMF’s latest Global Financial Stability Report seeks to fill that gap by constructing measures of the riskiness of credit allocation, which should help policy makers spot clouds on the economic horizon. Continue reading “Risky Business: Reading Credit Flows for Crisis Signals” »

For Home Prices in London, Check the Tokyo Listings

By Claudio Raddatz Kiefer and Jane Dokko

April, 10, 2018

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

Hong Kong viewed from Victoria Peak. House prices across countries and cities are increasingly moving in tandem (Photo: Fraser Hall/Robert Harding/Newscom).

If house prices are rising in Tokyo, are they also going up in London?

Increasingly, the answer is yes.

In recent decades, house prices around the world have shown a growing tendency to move in the same direction at the same time. What accounts for this phenomenon, and what are the implications for the world economy? These are questions that IMF economists explore in Chapter 3 of the latest Global Financial Stability Report. Continue reading “For Home Prices in London, Check the Tokyo Listings” »

A Digital-Savvy Indonesia

By Tidiane Kinda and Ting Yan

February 22, 2018

Version in  中文 (Chinese), baˈhasa indoneˈsia (Indonesian)

A salesperson shows a customer the latest smartphones in a showroom in Jakarta, Indonesia: the use of mobile internet services continues to grow rapidly in the country (photo: Beawhiharta/Reuters/ /Newscom).

With the third largest youth population in the world and 130 million active social media users, Indonesia is poised to become the biggest digital economy country in Southeast Asia. To fully embrace the digital opportunity, Indonesia must enhance its infrastructure and increase internet penetration to lift economic growth and productivity.

According to a McKinsey report, digitization could expand Indonesia’s economy by 10 percent of GDP and add 3.7 million jobs by 2025. Continue reading “A Digital-Savvy Indonesia” »

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