Corruption Disruption

By Christine Lagarde

December 8, 2017

Versions in 中文 (Chinese),  Français (French), Русский (Russian)

Corruption can have devastating effects on economic growth and stability (photo: Patric Sandri IKON Images/Newscom)

Why does the IMF care so deeply about corruption? The reason is simple. The job of the IMF is to protect global economic stability and promote strong, sustainable, balanced, and inclusive economic growth. And this becomes difficult, if not impossible, to achieve in the presence of entrenched and institutionalized corruption. Continue reading “Corruption Disruption” »

Chart of the Week: Sharing the Wealth: Inequality and Who Owns What

By IMFBlog

December 7, 2017

Luxury yachts in Monaco: The surge in top incomes, combined with high savings, has resulted in growing wealth inequality (photo: Eric Gaillard/Newscom).

Income inequality among people around the world has been declining in recent decades. But the news is not all good. Inequality within many countries has increased, particularly in advanced economies.

In addition to income inequality, wealth inequality—what you have accumulated, as opposed to what you earn—is closely related, and reflects differences in savings, inheritances, and bequests. Continue reading “Chart of the Week: Sharing the Wealth: Inequality and Who Owns What” »

Improving Financial Stability in China

By Ratna Sahay and James P. Walsh

December 6, 2017

Version in  中文(Chinese), Español (Spanish), Français (French),  Русский (Russian)

A man walks past a bank branch in Beijing: China’s leaders have made financial stability one of their top priorities (photo: Stephen Shaver/UPI/Newscom).

China’s leaders have made financial stability one of their top priorities. Given the size and importance of the Chinese market, with the world’s largest banks and second-largest stock market, that is welcome news for China and the world. The financial system permeates virtually all aspects of economic activity, having played a key role in facilitating rapid economic growth and in sharply reducing poverty rates.

China is moving from the world’s factory floor toward  a more modern, consumer-driven economy. During this transition, however, some tensions have emerged in the financial sector. Continue reading “Improving Financial Stability in China” »

Taxes, Debt and Development: A One-Percent Rule to Raise Revenues in Africa

By Vitor Gaspar and Abebe Aemro Selassie

December 5, 2017

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

School children in Ghana: building a country’s tax capacity helps pay for education and health care (photo: Vacca Sintesi/SIPA/Newscom).

Tax revenues play a critical role for countries to create room in their budgets to increase spending on social services like health and education, and public investment. At a time when public debt levels in sub-Saharan Africa have increased sharply, raising tax revenues is the most growth-friendly way to stabilize debt. More broadly, building a country’s tax capacity is at the center of any viable development strategy to meet the ongoing needs for expanding education and health care, and filling significant infrastructure gaps. Continue reading “Taxes, Debt and Development: A One-Percent Rule to Raise Revenues in Africa” »

More People, More Technology, More Jobs: How to Build Inclusive Growth

By Stefania Fabrizio and Andrea F. Presbitero

December 4, 2017

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

Pretoria, South Africa: technicians work inside a new locomotive (photo: Zhai Jianlan Xinhua News Agency/Newscom).

Population growth and technological innovation don’t necessarily have to widen inequality in developing countries. They can also offer new opportunities to increase growth and create jobs: the long-term outcomes depend on today’s policy choices. But those choices are not easy because policies for sustained and inclusive growth may conflict with short-term needs. We look at the trade-offs and how to balance short- and long-term goals for sustainable and inclusive growth. Continue reading “More People, More Technology, More Jobs: How to Build Inclusive Growth” »

Shifting Sands

By IMFBlog

November 30,2017

This issue of F&D focuses on the Middle East and North Africa. We take stock of the region’s rapid transformation since the uprisings of 2011—a period that raised the hopes of millions for a better future, and caused despair for millions of others.

The iron lid that had kept Arab societies artificially stable was lifted by the uprisings, writes Marwan Muasher of the Carnegie Endowment for Peace. Now, the only path to stability and prosperity is through building better institutions, sharing power, and implementing policies that will foster inclusive growth—a process that will require a new social contract between governments and society. Continue reading “Shifting Sands” »

Chart of the Week: Oil Prices & Energy Subsidies

By IMFBlog

November 27, 2017

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

Universal fuel and energy subsidies have been prevalent in sub-Saharan Africa, but they have substantial drawbacks (photo: Reuters/Newscom).

Reforms in some mostly oil-exporting countries, along with lower international fuel prices since 2014, have reduced the size of fuel subsidies in sub-Saharan Africa, and they need to do more  given the recent rise in international fuel prices.

Universal fuel and energy subsidies have been prevalent in sub-Saharan Africa, but they have substantial drawbacks. They tend to benefit the rich rather than the poor, foster fuel overconsumption, and crowd out more productive government spending. Continue reading “Chart of the Week: Oil Prices & Energy Subsidies” »

5 Things You Need to Know About the IMF and Gender

Woman engineer at work: The IMF's research shows that countries can reap benefits from closing gender gaps (photo: nimis69/iStock by Getty Images)

By IMFBlog

November 22, 2017

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

Women count. They contribute to society in every way, including as a crucial part of their countries’ economic growth and prosperity.

Not long ago, few people would have expected the International Monetary Fund to be engaged in work on gender inequality. We began by incorporating gender analysis and policy advice in our annual assessments of countries’ economies. Today, with some 30 gender consultations completed, and a dozen more planned, we have made a dent. But there is still a long way to go. Continue reading “5 Things You Need to Know About the IMF and Gender” »

Roads or Schools: A Critical Tradeoff

By Manoj Atolia, Bin Grace Li, Ricardo Marto, and Giovanni Melina

November 9, 2017 

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

Low-income countries tend to spend less on schools than on roads as a share of GDP (photo: iStock by Getty Images).

Roads or schools? It’s a question akin to the “guns or butter” choice that governments around the world confronted in the 20th century: How to spend a nation’s finite resources to produce the maximum benefit for its people.

In our recent IMF Working Paper, we find that low-income countries tend to spend less on schools than on roads as a share of GDP—even though investment in education may be a more pressing need in their societies. 

Continue reading “Roads or Schools: A Critical Tradeoff” »

Understanding and Managing Financial Interdependence

By Maurice Obstfeld

November 8, 2017

(photo: AlexLMX and David Hunt/iStock)

The 18th Annual Jacques Polak Annual Research Conference last week opened with Managing Director Christine Lagarde noting the ebb and flow of capital movements into emerging market and developing economies since the turn of the millennium. She asked three questions at the heart of the discussion, and to which speakers returned consistently during the conference: Continue reading “Understanding and Managing Financial Interdependence” »

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