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” »

Chart of the Week: Malaysia Needs More Women in the Workforce

By IMFBlog

April 2, 2018

Version in baˈhasa indoneˈsia (Indonesian)

Four students walk past a bank in Kuala Lumpur, Malaysia: Policies like improving the quality of education can help the country increase the number of women in the workforce (photo: John Mulligan/iStock by Getty Images).

Malaysia, a country well on its way to achieving high income status, can increase the number of women in the labor force by implementing key labor market reforms. And the country should, because our research shows that more women in the workforce benefits the economy.  Continue reading “Chart of the Week: Malaysia Needs More Women in the Workforce” »

The Economic Scars of Crises and Recessions

By Valerie Cerra and Sweta C. Saxena

March 21, 2018

Version in  日本語 (Japanese), Português  (Portuguese)

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” »

A Framework for Currency Unions and IMF Lending

By Sean Hagan and Hugh Bredenkamp

March 16, 2018

Versions in عربي (Arabic), 中文 (Chinese), Español (Spanish), 日本語 (Japanese), 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

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” »

Fintech Quiz: How Much Do You Know?

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?” »

The Struggle to Manage Debt

By Christoph Rosenberg

March 1, 2018

Good economic times offer an opportunity to tackle budget deficits

The global economy has a spring in its step. Growth is picking up, and we at the IMF have been ratcheting up our forecasts. Government coffers are filling and, with more people at work, demand for public social support is receding. The fiscal woes of the past decade seem behind us.

But this sunny perspective ignores debt levels that remain close to historic highs and the inevitable end of the cyclical upswing. Estimates of underlying growth potential have hardly budged, and interest rates—the cost of servicing all this debt—are starting to rise, which will eventually make it harder to refinance bonds and loans. Continue reading “The Struggle to Manage Debt” »

Communications Can Help to Get Financial Stability Off the Ground

By Olga Stankova

February 22, 2018 

Versions in 中文 (Chinese), Español (Spanish), Português (Portuguese), Русский (Russian)

Policy and communications—two wings to fly to success (photo: iStock by Getty Images).

When the capacity to communicate effectively on financial stability policies is not there, it is like trying to fly a plane with one wing missing. It takes more than sound policy making. Communications is an essential part of the job.

Following the global financial crisis, many countries redoubled their efforts to build stronger financial stability frameworks. Central banks and supervisory agencies have enhanced their capacity to identify and monitor systemic risks in the financial system and have developed new policies to mitigate them. Continue reading “Communications Can Help to Get Financial Stability Off the Ground” »

The Euro Area Needs a Fiscal Union

By Helge Berger, Giovanni Dell’Ariccia, and Maurice Obstfeld

February 21, 2018

Version in Français (French) 

Without more tangible elements of a fiscal union, the euro area will remain fundamentally vulnerable to shocks. (photo: iStock by GettyImages) .

The euro area is experiencing a robust recovery, but the architecture supporting Europe’s currency union remains incomplete and leaves the region vulnerable to future financial crises.

While substantial progress has been made to address some architectural issues—conditional lending facilities and key elements of a banking union—we argue in our recent paper that the euro area needs to build elements of a common fiscal policy, including more fiscal risk sharing, to preserve financial and economic integration and stability. Without some degree of fiscal union, the region will continue to face existential risks that policymakers should not ignore. While this is not a new topic, the current favorable economic climate might be the moment to advance the discussion—and the chance to strengthen the euro area. Continue reading “The Euro Area Needs a Fiscal Union” »

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