Catch-Up Prospects in Emerging Economies: A Glass One Quarter Empty

By IMFBlog

November 6, 2017

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

A closer look at per capita incomes by country paints a different and more nuanced picture (photo: Pavel1964/iStock).

Per capita incomes in emerging market and developing economies are expected to grow by about 2 percentage points faster per year than advanced economies between 2017 and 2022. The implication is that the gap in income levels between the two groups of countries is narrowing. However, a closer look at per capita incomes by country paints a different and more nuanced picture.  Continue reading “Catch-Up Prospects in Emerging Economies: A Glass One Quarter Empty” »

Inequality: Fiscal Policy Can Make the Difference

By Vitor Gaspar and Mercedes Garcia-Escribano

 October 11, 2017

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

Wealth and poverty side-by-side in Rio de Janeiro, Brazil: inequality is rising within countries around the world (photo: Jean-Marc David/SIPA/Newscom). 

Income inequality among people around the world has been declining in recent decades. This is due to countries like China and India’s incomes catching-up to advanced economies. But the news is not all good. Inequality within countries has increased, particularly in advanced economies. Since the global economic recovery has gained pace and is now widespread, policymakers have a window of opportunity to respond with reforms that tackle inequality, and our new Fiscal Monitor shows how the right mix of fiscal policies can make the difference.

Continue reading “Inequality: Fiscal Policy Can Make the Difference” »

Inequality: Tools from the Old Masters to Help Today’s Policymakers

By Vitor Gaspar, Paolo Mauro, and Tigran Poghosyan

October 3, 2017

Unemployed day laborers in South Africa: the country has relatively high income, but also high inequality (photo: Rogan Ward/Newscom).

With inequality rising in many countries, policymakers need to choose the best fiscal policies that will help share the benefits of economic growth, and in so doing, make it more inclusive.

The early 20th century English economist Arthur Pigou, among others, saw economic welfare as influenced by both “the size of the national dividend” and “the way in which it is distributed among the members of the community.” Continue reading “Inequality: Tools from the Old Masters to Help Today’s Policymakers” »

Better thy Neighbor? Cross-border Effects of Fiscal Actions

By Patrick Blagrave, Giang Ho, Ksenia Koloskova, and Esteban Vesperoni

September 27, 2017

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

Domestic fiscal policies, such as public spending, can generate meaningful spillovers to neighboring countries (Photo: Ymgerman/iStock by GettyImages)

In the wake of the global financial crisis, fiscal stimulus was advocated widely to help mitigate the recession. The thinking at the time was that fiscal stimulus would be particularly effective because its impact on activity tends to be larger when demand falls short of supply and central banks keep interest rates low. This, in turn, would lead to larger positive cross-border effects—or spillovers—on other countries.

Continue reading “Better thy Neighbor? Cross-border Effects of Fiscal Actions” »

Back-to-School Blogs

By IMFBlog

September 5, 2017

Back to school in Paris, France: get caught up on our top blogs you may have missed over the summer (photo: LAURENT CHAMUSSY/SIPA/Newscom)

What a summer it’s been. To help you get a handle on all that has happened in the global economy, our editors have compiled a handy primer of our blogs published over the summer months. Continue reading “Back-to-School Blogs” »

The Benefits and Costs of a U.S. Tax Cut

By Sandra Lizarazo, Adrian Peralta-Alva, and Damien Puy

September 1, 2017

Versions in Español (Spanish)

A recent IMF paper looks at the effects of lowering personal income tax rates on income distribution and the U.S. economy (photo: Ingram Publishing/Newscom)

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” »

Off the Charts: Your Favorite 5 Charts

By IMFBlog

August 28, 2017

(photo: iStock by Getty Images).

Much as sailors use nautical charts to determine their location at sea, economists use charts to show who we are, where we are, and where we might be going.

In the Spring, we began our Chart of the Week feature on the blog: snapshots in time and over time of how economies work to help illuminate the uncharted waters ahead for the global economy.

Here are our top five charts of the week, based on readership:

Continue reading “Off the Charts: Your Favorite 5 Charts” »

Pension Shock

By Mauricio Soto

August 24, 2017

Young adults in the workforce will need to build their own nest eggs in the age of public pension reforms. (photo: Ingram Publishing/Newscom).

Young adults in advanced economies must take steps to increase their retirement income security

Public pensions have played a crucial role in ensuring retirement income security over the past few decades. But for the millennial generation coming of working age now, the prospect is that public pensions won’t provide as large a safety net as they did to earlier generations. As a result, millennials should take steps to supplement their retirement income.

Continue reading “Pension Shock” »

A Common Cause for Sustainable Growth and Stability in Central Africa

By Abebe Aemro Selassie

August 1, 2017

Version in Français (French),  Português (Portuguese), and Español (Spanish);

Woman with a machete in Bafut, Cameroon: Six countries in Central Africa have a strategy to turn their economies around, with help from the IMF (photo: Heiner Heine/imageBroker/Newscom)

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” »

Central, Eastern, and Southeastern Europe: Harnessing the Power of Good Governance

By Poul Thomsen

July 27, 2017

Dubrovnik, Croatia. Countries in the region should continue working on good governance for higher growth (photo: Album/Prisma/Newscom)

In many ways, Central, Eastern, and Southeastern Europe is an incredible success story. In less than a generation, countries moved from centrally-planned economies to market-based ones—transforming their legal systems, public administrations, and economic policies, to name a few key elements. Yet, for the sake of higher growth in the future, countries need to continue enhancing institutions and good governance.

Enhancing institutions and good governance—the efficient governing of a country—remains at the core of the reform agenda to raise prosperity to advanced European living standards. Many countries have joined the European Union, a vital anchor toward these goals, and others are aspiring to join. Continue reading “Central, Eastern, and Southeastern Europe: Harnessing the Power of Good Governance” »

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