Chart of the Week: Distribution of Globalization’s Gains

By IMFBlog

May 31, 2018

A garment factory in Ethiopia, which globalization has helped to boost its growth (photo: Kay Neitfeld/Newscom).

While globalization is generally good for economic growth, the benefits are subject to diminishing marginal returns, according to a recent study of 147 countries from 1970 to 2014. The study looks at how globalization affects the distribution of incomes across and within countries.   Continue reading “Chart of the Week: Distribution of Globalization’s Gains” »

Our Digital Future

By Camilla Lund Andersen

May 30, 2018

“Money makes the world go around,” Liza Minnelli famously sang in the movie Cabaret. Money has for centuries been central to human relationships. Loss of faith in its value can result in economic and political instability, even war. In the past few years, financial technology—fintech for short—has caught the world’s imagination by offering alternatives to traditional means of payment. Will digitalization redefine money? In this issue, we explore the possible consequences, good and bad. Continue reading “Our Digital Future” »

Trust and the Future of Multilateralism

By David Lipton

May 10, 2018
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Where trust exists and is reciprocated—where there is “confidence” in policies, institutions and systems—economies will achieve more (photo: iStock by Getty Images).

We live in an era of doubts and questions about the global order.  We have seen an erosion of trust in bedrock institutions—political parties, national governments, regional authorities, and among international trade and investment partners. Continue reading “Trust and the Future of Multilateralism” »

Shining a Bright Light into the Dark Corners of Weak Governance and Corruption

By Christine Lagarde

April 22, 2018

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

Anti-corruption strategies require broader regulatory and institutional reforms (photo: Kritchanut/iStock).

The IMF Executive Board has just endorsed a new framework for stepping up engagement on governance and corruption in our member countries. Let me talk about why this is important and what it means for our work.

Continue reading “Shining a Bright Light into the Dark Corners of Weak Governance and Corruption” »

Bringing Down High Debt

By Vitor Gaspar and Laura Jaramillo

April 18, 2018

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

High debt makes governments’ financing vulnerable to sudden changes in market sentiment (photo: NYSE-LUCAS JACKSON-REUTERS Newscom).

Global debt hit a new record high of $164 trillion in 2016, the equivalent of 225 percent of global GDP. Both private and public debt have surged over the past decade. High debt makes government’s financing vulnerable to sudden changes in market sentiment. It also limits a government’s ability to provide support to the economy in the event of a downturn or a financial crisis.

Countries should use the window of opportunity afforded by the economic upswing to strengthen the state of their fiscal affairs. The April 2018 Fiscal Monitor explores how countries can reduce government deficits and debt in a growth-friendly way.

Continue reading “Bringing Down High Debt” »

Fiscal Rules: Make them Easy to Love and Hard to Cheat

By Xavier Debrun, Luc Eyraud, Andrew Hodge, Victor Lledo, Catherine Pattillo, Abdelhak Senhadji

April 13, 2018

Versions in Español (Spanish), Français (French),  Português  (Portuguese)

The national debt clock in New York City: a fiscal rule, like the debt ceiling, should not be set too low or too high. (photo: Frances M. Roberts/Newscom)

Rules to contain lavish government deficits are most effective if countries design them to be simple, flexible, and enforceable in the face of changing economic circumstances.

In new analysis, we look at fiscal rules in over 90 countries and, based on their experiences, find that the rules put in the place over the last three decades often were too complex, overly rigid, and difficult to enforce. Continue reading “Fiscal Rules: Make them Easy to Love and Hard to Cheat” »

The Digital Gamble: New Technology Transforms Fiscal Policy

By Vitor Gaspar and Geneviève Verdier

April 12, 2018

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

Traffic in Singapore: the city uses digital technology for road pricing to manage road congestion congestion (photo: Kua Chee Siong/ SPH/Newscom)..

In Rwanda, digitally-monitored drones deliver blood supplies to hospitals. In Estonia, it takes five minutes to file taxes and 99 percent of government services are available online. Singapore was the first city to implement electronic road pricing to manage congestion. The world is becoming digital, and reliable, timely, and accurate information is available at the push of a button. Governments are following suit, using digital tools for tax and expenditure policy, public financial management, and public service delivery.  Continue reading “The Digital Gamble: New Technology Transforms Fiscal Policy” »

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” »

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” »

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