September 1, 2017
Versions in Español (Spanish)
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” »
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.
August 3, 2017
Zero was gradually adopted in the ancient world—both east and west—as the ultimate point of reference, a point above and below which things change. For the ancient Egyptians, zero represented the base of pyramids. In science it became the freezing point of water, in geography the altitude of the sea, in history the starting point of calendars.
In the realm of monetary policy, zero was typically seen as the lower bound for interest rates. That has changed in recent years in the context of a slow recovery from the 2008 crisis. Several central banks hit zero and began experimenting with negative interest rate policies. Most did so to counter very low inflation, but some also were concerned about currencies that were too strong. Continue reading “A Dip into Subzero Policy Rates” »
August 1, 2017
Six countries in central Africa have been hit hard by the collapse in commodity prices. Oil prices dropped, economic growth stalled, public debt rose, and foreign exchange reserves declined. A delayed response from policymakers, and a regional conflict have worsened the situation further for people in the region.
The countries of the Central African Economic and Monetary Community are Gabon, Cameroon, Chad, the Central African Republic, the Republic of Congo, and Equatorial Guinea. They share a common currency—the CFA franc—that is pegged to the euro, and have a common central bank that holds the region’s pool of foreign exchange reserves. Continue reading “A Common Cause for Sustainable Growth and Stability in Central Africa” »
July 13, 2017
Asia today is the fastest-growing region in the world, and the largest contributor to global growth. It has six members of the Group of Twenty advanced and emerging economies, and its economic and social achievements are well recognized.
But 20 years ago, July 1997 marked the beginning of the Asian Financial Crisis, when a combination of economic, financial and corporate problems triggered a sharp loss of confidence and capital outflows from the region’s emerging market economies. The crisis began in Thailand on July 2, when the baht’s peg to the dollar was dropped, and eventually spread to Korea, Indonesia and other countries. Continue reading “What We Have Seen and Learned 20 Years After the Asian Financial Crisis” »
June 8, 2017
Calculating how much capital banks should have is often a bone of contention between regulators and banks. While there has been considerable progress on reaching consensus on an international standard, one key issue remains unresolved. This is a proposal to establish a “floor,” or minimum, for the level of capital the largest banks must maintain.
Some financial institutions and national authorities question the need for a “floor,’’ arguing either that differences in business models or other elements of the global regulatory framework—notably limits on the amount of leverage banks may take on—make them redundant. We disagree. The floor reduces the chances that banks can game the system to reduce their capital buffers to levels that aren’t aligned with their risks. It is an essential element of global efforts to create a level playing field for banks operating across countries by strengthening common standards for regulation, supervision and risk management.
Versions in عربي (Arabic)
May 8, 2017
Conflict has been on the rise since the early 2000s given the wars in Afghanistan, Iraq, and Syria.
Conflict leads not only to immeasurable human costs, but also to substantial economic losses with consequences that can persist for years. The tragic rise in conflict has weighed on global GDP growth in recent years, given the increasing number of countries experiencing strife, the severe effect on economic activity, and the considerable size of some of the affected economies.
The IMF’s most recent World Economic Outlook (Box 1.1) takes a closer look through the lens of conflict’s impact on economic growth and migration. Continue reading “Chart of the Week: Conflict’s Legacy for Growth” »
John Evans is Head of the Trade Union Advisory Committee to the Organisation for Economic Cooperation and Development, which represents some 65 million organized workers worldwide. In this podcast, he says that the labor market works much like any other market, driven by supply and demand, and the latter is very dependent on how well the economy is doing. Continue reading “Union of Labor and Growth” »
Versions in Français (French)
Government policies matter when it comes to public health. And when a country’s economy is suffering a severe economic crisis, the decisions become even more critical. Over the past few decades, protecting social programs and spending on health has been a cornerstone of the IMF’s support for countries.