Productivity drives our living standards. In our April 2017 Fiscal Monitor, we show that countries can raise productivity by improving the design of their tax system, which includes both policies and administration. This would allow business reasons, not tax ones, to drive firms’ investment and employment decisions.
Economic growth appears to be strengthening across the large economies, but that does not mean financial-sector regulation can now be relaxed. On the contrary, it remains more necessary than ever, as does international cooperation to ensure the safety and resilience of global capital markets. That is why the Group of Twenty (G20) finance ministers and central bank governors reiterated their support for continuing financial-sector reform at their meeting in Baden-Baden last week. (more…)
Baden-Baden, the German spa town built on ancient thermal springs, is a fitting venue to discuss the health of the global economy during this week’s meeting of the Group of Twenty finance ministers and central bank governors.
Policymakers will likely share a sense of growing optimism, because the recent strengthening of activity suggests that the world economy may finally snap out of its multi-year convalescence. (more…)
Deep unease about rising inequality and stagnating living standards in advanced economies was at the heart of the 2016 political upheaval. Globalization and trade have been blamed, but entrenched slow growth—what economists call secular stagnation—may be the real culprit. Parents who took for granted that their children would enjoy a brighter future had their dreams dashed by the global financial crisis of 2008. Nine years later, rising populism and a return to nationalist, inward-looking policies threaten to unravel the postwar economic order. (more…)
“If we’re fighting each other because we can’t design a system that actually works for everybody, then working people will again continue to mistrust our institutions, and the threat to democracy is very real; you see it.” – Sharan Burrow
By Rabah Arezki
Agriculture and food markets are plagued with inefficiencies that have dramatic consequences for the welfare of the world’s most vulnerable populations. Globally, farm subsidies amount to over $560 billion a year—equivalent to nearly four times the aid given to developing countries by richer ones. Major emerging-market nations have increased subsidies rapidly, even as rich nations cut theirs drastically. Meanwhile, tariffs on farm products remain a major point of contention in global trade talks.
One third of global food production goes to waste, while food insecurity is still rampant in developing countries. Even with the explosion of agricultural productivity since the middle of the 20th century, food security remains a challenge for much of the developing world. Food-calorie production will have to expand by 70 percent by 2050 to keep up with a global population that’s forecast to grow to 9.7 billion from last year’s 7.3 billion. Food insecurity can lead to violence and conflicts that can spill over well beyond borders. (more…)
Four years ago, at the World Economic Forum in Davos, IMF Managing Director Christine Lagarde warned of the dangers of rising inequality, a topic that has now risen to the very top of the global policy agenda.
While the IMF’s work on inequality has attracted the most attention, it is one of several new areas into which the institution has branched out in recent years. A unifying framework for all this work can be summarized in two words: Inclusive growth. (more…)
New York Times columnist and best-selling author Thomas Friedman says our lives are being transformed in so many realms at once—it’s dizzying.
“We’re in the middle of 3 accelerations; the market, mother nature, and Moore’s law. Moore’s law says the power of microchips will double every 24 months, mother nature is climate change, biodiversity loss and population, and the market is digital globalization.” (more…)
What a year it has been. 12 months with big implications for the global economy.
In 2016 our readers’ curiosity focused on a wide range of hot topics in the world of economic and financial policy: the economic impact of migration, China’s economic transition, the prospects for negative interest rates, the way forward for Greece, the future of commodity prices, and the outlook for Latin America, to name a few. We compiled this top ten list for the past year based on readership. (more…)
2016 has been a year of political upheaval, as accepted truths about the power of globalization to transform lives and lift millions out of poverty are being questioned by electorates in Europe, the United States, and elsewhere. No longer prepared to take experts and elites at their word, many voters appear to be rejecting the adverse consequences of globalization by casting their ballot for antiestablishment messages and candidates.