Chart of the Week: Central and Eastern Europe Close the Gap

By IMFBlog

May 22, 2017

Most of the countries of Central, Eastern, and Southeastern Europe will see their economies humming away at a strong growth rate in 2017. A measure of their success at fully utilizing their economic machine is the output gapthe difference between what the economy is currently producing, and what it can produce when it is at full capacity.

Our Chart of the Week from a recently published report on the Central, Eastern, and Southeastern European region shows how close these economies come to performing at full potential. (more…)

Restarting the Growth Engine in Sub-Saharan Africa

By IMFBlog

May 19, 2017

Version in Français

The IMF’s latest economic health check of sub-Saharan Africa shows that growth fell to its lowest level in 20 years.

In this podcast, the IMF African Department’s Celine Allard, who oversaw the report, says that this drop brought a halt to the 5 to 6 percent growth rate that was enjoyed in the last two decades. Some factors contributing to this slowdown are lower commodity prices, the devastation of a severe drought—exacerbating crop infestation and leading to a famine affecting some 20 million people—and political conflicts that affect trade.

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Chart of the Week: Budget-friendly, Equitable Growth in France

By IMFBlog

May 15, 2017

Version in Français (French)

One need look no further than the national motto—liberté, égalité, fraternité—to understand that equality is an especially important concept in France. French policies play an important role in combating inequality. This is primarily achieved through a combination of minimum wage policies and an extensive tax and transfer system.

But these traditional equality-enhancing policies may have reached their limits as unemployment has become entrenched and budgets have been severely stretched. So, what are the best policies for a country weighing how to boost growth, lessen inequality, and minimize costs? It is not a zero sum game.

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Every Woman Counts: Gender Budgeting in G7 Countries

By Christine Lagarde

May 13, 2017

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

Finance ministers and central bank governors from the G7 countries met in Bari, Italy, this weekend to consider global economic issues, including steps to maintain economic stability and improving gender equality as important agenda items.

Women’s economic empowerment has long been an international priority, of course. The G6—as it was then—was first created in 1975, a year named “International Women’s Year” by the United Nations to help more women worldwide realize their full potential. Mountain climber Junko Tabei masterfully demonstrated this potential when she became the first woman to conquer Mount Everest in that year. However, as the world dealt with the aftermath of the first oil shock and the end of the fixed exchange rate system, global economic stability and women’s empowerment were rarely part of the same conversation.

Junko Tabei, the first woman to climb Mount Everest and the “Seven Summits”—the highest mountains across seven continents (photo: John van Hasselt/Corbis/Getty Images)

How times have changed. Today, in discussions on the global economy, female economic empowerment is almost always on the agenda. (more…)

Productivity, Technology, and Demographics

By IMFBlog

May 5, 2017

Hal Varian, chief economist at Google, says that if technology cannot boost productivity, then we are in real trouble.

In a podcast interview, Varian says thirty years from now, the global labor force will look very different, as working age populations in many countries, especially in advanced economies, start to shrink. While some workers today worry they will lose their jobs because of technology, economists are wondering if it will boost productivity enough to compensate for the shifting demographics—the so-called productivity paradox.

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Emerging Economy Consumers Drive Infrastructure Needs

By Paolo Mauro

May 4, 2017

Versions in 中文 (Chinese), Français (French), 本語 (Japanese), Русский (Russian), and Español (Spanish)

The infrastructure needs of emerging market economies, like China or India, differ from those of advanced economies like the United States or Germany. Many emerging economies must substantially expand their energy and transportation networks, or build them from scratch, to accommodate rapid economic growth. Our research shows the more people make, the more they spend on transportation. With emerging economies’ middle classes booming and incomes rising, this has big implications for how policymakers choose to invest in infrastructure. (more…)

Chart of the Week: Sharing the Fruits of Growth

By IMFBlog

At last week’s Spring Meetings of the IMF and World Bank, economists and policymakers discussed ways to maintain the momentum of the global economic expansion—while also ensuring that the fruits of growth are shared more widely within their countries. Fiscal policy—government’s ability to tax and spend—has an important role to play.

The effectiveness of fiscal policy in mitigating inequality varies widely by country, as seen in our Chart of the Week. The chart shows the redistribution effect of fiscal policy before and after taxes, as measured by the change in the Gini coefficient. A Gini of zero expresses perfect equality, while a Gini of one expresses maximum inequality. (more…)

How an Extended Period of Low Growth Could Reshape the Financial Industry

By Gaston Gelos and Jay Surti

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

What happens if advanced economies remain stuck in a long-lasting funk marked by tepid growth, low interest rates, aging populations and stagnant productivity? Japan offers an example of the impact on banks, and our analysis suggests that there could also be far-reaching consequences for insurance companies, pension funds, and asset-management firms.

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With Global Financial Markets, How Much Control Do Countries Have Over Economic Policies?

By Selim Ali Elekdag and Gaston Gelos

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

The outlook for further interest-rate increases by the US Federal Reserve revives interest in a compelling question: In an increasingly integrated global financial system, how much control do countries outside of the US retain over their economic policies?

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Union of Labor and Growth

By IMFBlog

John Evans is Head of the Trade Union Advisory Committee to the Organisation for Economic Cooperation and Development, which represents some 65 million organized workers worldwide. In this podcast, he says that the labor market works much like any other market, driven by supply and demand, and the latter is very dependent on how well the economy is doing.  (more…)

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