Three German Economic Challenges with European Effect

By Christine Lagarde

January 17, 2018

Berlin, Germany: The bright economic outlook offers a chance for policymakers to address the country’s economic challenges (photo: iStock/Andrey Danilovich).

The economic outlook for Germany is bright. Optimism among investors abounds, and unemployment is at a record low. Policymakers now have a unique opportunity to address the challenges facing the German economy. These are varied but include boosting wages, investing in infrastructure, and reducing the large trade surplus. As the largest economy of the euro area, Germany also has a stake in fostering reforms in the monetary union. Successfully rising to these challenges is critical for Germany and for the euro area as a whole.

Continue reading “Three German Economic Challenges with European Effect” »

By | January 17th, 2018|Advanced Economies, Aging, inflation, Infrastructure, Investment, productivity, trade, wages|

No Roads? No Problem: The Leapfrogging Drones of Rwanda

By IMFBlog

January 12, 2018

Zipline drone on a launch pad at operations center in Muhanda, Rwanda. (photo: James Akena/Reuters/Newscom).

What’s the best solution to a lack of infrastructure? Find a solution that doesn’t require infrastructure. That’s what Zipline has done in Rwanda—a start-up that deploys drones to make emergency medical deliveries to remote hospitals and clinics.

“Obviously in instances where Zipline can make a delivery to a place that wouldn't otherwise be reachable by roads, that's a good example of leapfrogging over the absence of infrastructure,” Zipline CEO Keller Rinaudo said. Continue reading “No Roads? No Problem: The Leapfrogging Drones of Rwanda” »

The Art in Artificial Intelligence: Make the Robots Serve the Public Good

By Brian McNeill

January 11, 2018

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

Artificial intelligence can create a roadmap for future opportunities if utilized appropriately (photo: monsitj/iStock by Getty Images).

Over the past few years, artificial intelligence has rapidly matured as a viable field of technology. Machines that learn from experience, adjust to new inputs, and perform tasks once uniquely the domain of humans, have entered our daily lives in ways seen and unseen. Given the current breakneck pace of change and innovation, the question for governments and policymakers is how to harness the benefits of artificial intelligence, and not be trampled by the robot takeover of our nightmares. The answer is simple: make them work for us. Continue reading “The Art in Artificial Intelligence: Make the Robots Serve the Public Good” »

Weak Productivity: The Role of Financial Factors and Policies

By Romain Duval, Giuseppe Nicoletti, and Fabrizio Zampolli

January 8, 2018

Auto worker in Mexico: weak productivity has been a problem even before the global financial crisis (photo: Henry Romero/Newscom).

Almost ten years after the onset of the global financial crisis productivity growth remains anaemic in advanced economies despite very easy monetary conditions, casting doubts on the sustainability of the cyclical recovery. The productivity slowdown started well before the crisis, which then amplified the problem. To what extent can this slowdown be ascribed to policies and financial factors, including loose monetary policy prior to 2008, corporate and bank balance sheet vulnerabilities, and the exceptional monetary and financial policy responses to the crisis? Continue reading “Weak Productivity: The Role of Financial Factors and Policies” »

Gamechanger: The Digital Payment Boom in India

By IMFBlog

January 5, 2018

Madhur Deora, CFO of PayTM: Mobile payment platforms in India are providing small loans to people who’ve never had access to credit (IMF photo).

What does a shoe shiner in India have in common with central bankers and finance ministers? They both can appreciate the digital-payment boom. It’s sweeping the world but has accelerated in India, where last November the government demonetized—declaring that 86 percent of the country’s currency in circulation would cease to be legal tender. Continue reading “Gamechanger: The Digital Payment Boom in India” »

GDP: Falling Short

By IMFBlog

December 22, 2017

Economist Diane Coyle speaking at the IMF Statistical Forum on Measuring the Digital Economy (photo: IMF)

Gross domestic product, or GDP, has been used to measure growth since the Second World War when economies were all about mass production and manufacturing. In this podcast, economist Diane Coyle, says GDP is less well suited to measure progress in today’s digital economy. Continue reading “GDP: Falling Short” »

Chart of the Week: The Walking Debt: Resolving China’s Zombies

By IMFBlog

December 11, 2017

Version in 中文 (Chinese), 日本語 (Japanese)

IMF research shows that resolving China’s zombie firms can boost productivity and long-term growth prospects (photo: DNY59/iStock by Getty Images).

China’s “zombies” are non-viable firms that are adding to the country’s rising corporate debt problem, and are bad business. Zombie firms are highly indebted and incur persistent losses, but continue to operate with the support of local governments or soft loans by banks—adding very little value to economic prospects. China has already made a lot of progress in resolving these firms, and should continue its efforts to send the zombies packing. Continue reading “Chart of the Week: The Walking Debt: Resolving China’s Zombies” »

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” »

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