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The Euro Area Workforce is Aging, Costing Growth

By | August 17th, 2016|Advanced Economies, Employment, euro zone, growth, IMF, International Monetary Fund, Uncategorized|

By Shekhar Aiyar, Christian Ebeke, and Xiaobo Shao

Versions in Français (French), and Español (Spanish)

In parallel to the aging of the general population, the workforce in the euro area is also growing older. This could cause productivity growth to decline in the years ahead, raising another policy challenge for governments already dealing with legacies from the crisis such as high unemployment and debt.  Continue reading “The Euro Area Workforce is Aging, Costing Growth” »

Sluggish Business Investment in the Euro Area: The Roles of Small and Medium Enterprises and Debt

By | August 4th, 2016|Economic research, euro zone, Finance, Financial Crisis, IMF, International Monetary Fund, Investment, Public debt, Uncategorized|

By John C. Bluedorn and Christian Ebeke

Small businesses could be the lifeblood of Europe’s economy, but their size and high debt are two of the factors holding back the investment recovery in the euro area. The solution partly lies in policies to help firms grow and reduce debt.

Our new study, part of the IMF’s annual economic health check of the euro area, takes a novel bottom-up look at the problem. We analyze the drivers of investment using a large dataset of over six million observations in eight euro area countries, from 2003 to 2013: Austria, Belgium, Germany, France, Finland, Italy, Portugal, and Spain. Continue reading “Sluggish Business Investment in the Euro Area: The Roles of Small and Medium Enterprises and Debt” »

Global Growth: Too Slow for Too Long

By | April 12th, 2016|International Monetary Fund|

maurice-obstfeld2By Maurice Obstfeld

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

Global growth continues, but at an increasingly disappointing pace that leaves the world economy more exposed to negative risks. Growth has been too slow for too long.

The new World Economic Outlook released today anticipates a slight acceleration in growth this year, from 3.1 to 3.2 percent, followed by 3.5 percent growth in 2017. Our projections, however, continue to be progressively less optimistic over time.

Continue reading “Global Growth: Too Slow for Too Long” »

Doing It All—Women Boost the Bottom Line for Home, Firm, and Country

By | March 7th, 2016|Employment, Gender issues, growth, IMF, Inequality, International Monetary Fund, technology|

Christine LagardeBy Christine Lagarde

(Versions in عربي中文, EspañolFrançais, 日本語, Русский, Deutsch, and Italiano)

International Women’s Day—March 8—is one of my favorite days. It is a time to celebrate the impressive progress women at all levels of the career ladder have made in recent decades. More women in the labor force, and in more senior positions is good news for women, for their companies, and for their countries’ economies.

A new IMF staff study finds that in Europe, national policies, even taking account of personal preferences, can boost women’s participation in the workforce and enhance their chances for advancement.

Continue reading “Doing It All—Women Boost the Bottom Line for Home, Firm, and Country” »

A Strategy for Resolving Europe’s Problem Loans

By | September 24th, 2015|Advanced Economies, Economic Crisis, Economic research, Financial Crisis, Fiscal policy, growth, IMF, International Monetary Fund, Investment, Reform|

By Shekhar Aiyar and Anna Ilyina

Problem loans are clogging the arteries of Europe’s banking system. The global financial crisis and subsequent recession have left businesses and households in many countries with debts that they cannot repay. Nonperforming loans as a share of total loans in the EU have more than doubled since 2009, reaching €1 trillion—over 9 percent of the region’s GDP—by end-2014.  These loans are particularly high in the southern part of the euro area, as well as in several Eastern and Southeastern European countries. Only a handful of countries have managed to lower their nonperforming loan ratio to below its post-crisis peak.

Continue reading “A Strategy for Resolving Europe’s Problem Loans” »

Behind the News in Greece and China, Moderate Growth Continues

By | July 9th, 2015|Advanced Economies, Asia, Economic Crisis, Economic outlook, Emerging Markets, Europe, Financial Crisis, Globalization, growth, IMF, Inequality, International Monetary Fund, Latin America, Politics, Reform|

 By Olivier Blanchard

(Versions in Español and عربي)

Today we published the World Economic Outlook Update.

But first, let me talk about the elephant in the room, namely Greece.

The word elephant may not be right: As dramatic as the events in Greece are, Greece accounts for less than two percent of the Eurozone GDP, and less than one half of one percent of world GDP.
Continue reading “Behind the News in Greece and China, Moderate Growth Continues” »

Cross-Country Analysis of Housing Finance and Real Estate Booms

By | June 10th, 2015|Advanced Economies, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Finance, Financial Crisis, Fiscal policy, growth, IMF, International Monetary Fund, Investment, Reform|

By Eugenio Cerutti, Jihad Dagher, and Giovanni Dell’Ariccia

Housing finance—considered one of the villains of the recent global financial crisis—was seen, at least until recently, as a vehicle for economic growth and social stability.  Broader access to housing finance promotes home ownership, especially for younger and poorer households; which in turn is often linked to social stability, and ultimately economic growth.

But real-estate boom episodes have often ended in busts with dire economic consequences, especially when the boom was financed through fast credit growth.  Several countries have seen these boom-bust patterns over the last decade, particularly in some of the hardest hit countries during the global financial crises, such as Ireland, Spain, and the United States. Despite having different mortgage market structures, these three countries saw an astonishing increase in house prices and construction on the back of risky lending which was followed by a painful adjustment period—a mortgage credit boom gone bad.

Continue reading “Cross-Country Analysis of Housing Finance and Real Estate Booms” »

Securitization: Restore Credit Flow to Revive Europe’s Small Businesses

By | May 7th, 2015|Advanced Economies, Economic Crisis, Economic research, Finance, Globalization, growth, IMF, International Monetary Fund, Investment, Reform, Uncategorized|

By Shekhar Aiyar, Bergljot Barkbu, and Andreas (Andy) Jobst

If financing is the lifeblood of European small businesses, then the effect of the financial crisis was similar to a cardiac arrest. The flow of affordable credit from banks was choked off and small and medium-sized enterprises (SMEs) were hit hardest. Today, with bank lending still recovering from that shock, smart policy actions could open up securitization as a source of financing to help small businesses start up, flourish and grow.

SMEs are vital to the European economy. They account for 99 out of every 100 businesses, two in every three employees, and 58 cents of each euro of value added of the business sector in Europe. Improving access to finance would therefore not only revive small businesses, but also support a strong and lasting recovery for Europe as a whole.

Continue reading “Securitization: Restore Credit Flow to Revive Europe’s Small Businesses” »

Resolving Residential Mortgage Distress: Time to Modify

By | March 11th, 2015|Advanced Economies, Economic Crisis, Economic outlook, Economic research, Europe, Financial Crisis, growth, IMF, International Monetary Fund, Investment, Reform, Uncategorized|

By Jochen Andritzky

(Versions in Español)

In housing crises, high mortgage debt can feed a vicious circle of falling housing prices and economic slowdown. As a result, more households default on their mortgages and the crisis deepens.  A new IMF Working Paper studies the differences in the housing crises and policy responses in Iceland, Ireland, Spain, and the United States, and argues that crisis policies geared to provide temporary debt service relief for struggling households, followed by durable loan modifications, can help break this vicious circle.

Continue reading “Resolving Residential Mortgage Distress: Time to Modify” »

Down But Not Out

By | March 2nd, 2015|Advanced Economies, Asia, Economic outlook, Economic research, Emerging Markets, Employment, Europe, Fiscal policy, Globalization, growth, IMF, Uncategorized|

Jeff Hayden altBy Jeff Hayden

We drew our inspiration for Finance & Development's cover from Diego Rivera’s Detroit Industry murals at the Detroit Institute of Arts. Rivera, a Mexican artist, was commissioned in 1932 to paint the 27-panel visual epic as a tribute to the city’s assembly-line workers, scientists, doctors, secretaries, and laborers, many of whom were struggling at the time to keep their jobs amid the devastation of the Great Depression.

Continue reading “Down But Not Out” »

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