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Managing Debt Vulnerabilities in Low-Income and Developing Countries

By Tao Zhang

March 22, 2018

Versions in Português (Portuguese)  

Congested streets in Dhaka, Bangladesh. In a third of low-income countries, including Bangladesh, government deficits finance investment in much needed infrastructure (photo: Motoya Taguchi/Jiji Press/Newscom).

Government debt in some of the world’s poorest countries is rising to risky levels, a new IMF report shows. The report looks at economic developments and prospects among the world’s low-income countries, which account for a fifth of the world’s population but only four percent of global output. Continue reading “Managing Debt Vulnerabilities in Low-Income and Developing Countries” »

By | March 22nd, 2018|Advanced Economies, Africa, Asia, banking, capital flows, Caribbean, Central Asia, climate change, commodities, concessional lending, currency, Debt Relief, developing countries, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Employment, Environment, Europe, Financial Crisis, Fiscal, Fiscal discipline, Fiscal policy, Globalization, Government, growth, health, IMF, imports, inclusive growth, income, India, Inequality, inflation, International Monetary Fund, Investment, Jobs, labor force, labor markets, Latin America, LICs, Low-income countries, Middle East, Migration, monetary policy, Multilateral Cooperation, natural disasters, Politics, Poverty, productivity, Public debt, Reform, South America, taxation, trade, wages|
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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” »

By | March 21st, 2018|Advanced Economies, capital markets, currency, developing countries, Economic Crisis, Economic outlook, Economic research, Emerging Markets, exchange rates, Finance, Financial Crisis, Financial markets, Financial regulation, Financing, Government, IMF, income, inflation, International Monetary Fund, Investment, Jobs, labor force, labor markets, Low-income countries, monetary policy, Politics, productivity, recession, U.S., Uncategorized, unemployment|
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Adapting to Climate Change—Three Success Stories

By Evgenia Pugacheva and Mico Mrkaic

March 20, 2018

When governments subsidize private investment in adaptation, the economic costs of extreme weather events can be reduced (photo: Leolintang/iStock by Getty Images).

Climate change is one of the greatest threats facing our planet. Its negative effects on health, the biosphere, and labor productivity are already being felt throughout the world. Aware of the danger, communities, households, and governments have started taking measures to reduce their exposures and vulnerability to weather shocks and climate change. Our study in the World Economic Outlook shows that public investment in adaptation can partially reduce the economic costs of severe weather events.   Continue reading “Adapting to Climate Change—Three Success Stories” »

By | March 20th, 2018|Advanced Economies, Africa, Asia, climate change, developing countries, Economic outlook, Economic research, Environment, Europe, Fiscal, Fiscal policy, Globalization, Government, growth, health, housing, IMF, International Monetary Fund, Investment, labor markets, Latin America, Low-income countries, Middle East, natural disasters, taxation, technology, Uncategorized|
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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” »

By | March 16th, 2018|Advanced Economies, Asia, banking, capital flows, capital markets, Caribbean, currency, developing countries, Economic Crisis, Economic outlook, Economic research, euro zone, Europe, Europe's currency union, Financial Crisis, Financial markets, financial policy, Financial regulation, Financing, Fiscal policy, Government, IMF, International Monetary Fund, monetary policy, taxation, technology, trade|
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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” »

By | March 15th, 2018|Advanced Economies, Asia, banking, China, developing countries, Economic outlook, Economic research, education, Employment, Europe, exchange rates, exports, Finance, Financial Crisis, Financial markets, Fiscal, G-20, Gender issues, Globalization, Government, growth, IMF, imports, inclusive growth, income, Inequality, inflation, International Monetary Fund, Investment, Jobs, labor markets, Low-income countries, Multilateral Cooperation, productivity, Public debt, taxation, trade, U.S., Uncategorized, unemployment|
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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?” »

By | March 12th, 2018|Advanced Economies, Africa, Asia, capital flows, capital markets, China, correspondent banking, currency, developing countries, Emerging Markets, euro zone, Europe, Finance, Financial Crisis, Financial markets, financial policy, Financial regulation, Financing, Globalization, Government, income, Infrastructure, International Monetary Fund, Investment, Low-income countries, Middle East, productivity, taxation, technology, trade, U.S., Uncategorized|
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Beware of Strike-it-Rich Euphoria: the Curse of Potential Oil Wealth

By IMFBlog

March 9, 2018

(photo: Nielubieklonu/iStock).

The resource curse, or paradox of plenty, is when countries with an abundance of natural resources suffer stagnant economic growth or even contraction.

In this podcast, World Bank economist James Cust, says the problem of eradicating extreme poverty is going to be about how resource-rich countries manage their resource wealth. Continue reading “Beware of Strike-it-Rich Euphoria: the Curse of Potential Oil Wealth” »

By | March 9th, 2018|Africa, commodities, Economic research, Fiscal, Fiscal policy, Global Governance, Government, inclusive growth, Low-income countries, Oil, Poverty|
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Welfare Versus GDP: What Makes People Better Off

By Geoffrey Bannister and Alexandros Mourmouras

March 7, 2018

Oslo, Norway. In rich countries like Norway, that have greater life expectancy, more leisure, and lower inequality, measured well-being is higher than income (photo: iStock by Getty Images).

For years, economists have worked to develop a way of measuring general well-being and comparing it across countries. The main metric has been differences in income or gross domestic product per person. But economists have long known that GDP is an imperfect measure of well-being, counting just the value of goods and services bought and sold in markets.

The challenge is to account for non-market factors such as the value of leisure, health, and home production, such as cleaning, cooking and childcare, as well as the negative byproducts of economic activity, such as pollution and inequality. Continue reading “Welfare Versus GDP: What Makes People Better Off” »

By | March 7th, 2018|Advanced Economies, developing countries, Economic outlook, Economic research, education, Employment, Environment, Europe, Financial Crisis, Financial markets, Government, growth, health, housing, imports, income, Inequality, Infrastructure, International Monetary Fund, Jobs, labor force, labor markets, Low-income countries, Politics, Poverty, productivity, U.S., Uncategorized, unemployment, wages|
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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” »

By | February 21st, 2018|Advanced Economies, banking, Corporate Risk, corruption, Economic Crisis, Economic outlook, euro zone, Europe, Europe's currency union, Europe's fiscal union, Finance, Fiscal, Fiscal discipline, Fiscal policy, Government, International Monetary Fund, monetary policy, Public debt, taxation, Uncategorized|
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