As finance ministers and central banks gather in Washington this week for the spring meetings of the IMF and World Bank, income inequality will be among the topics of discussion.
While global economic integration has brought enormous benefits in the form of rising living standards, it has also contributed to widening inequality within some countries. In advanced economies, the incomes of the top 1 percent have grown three times faster than those of the rest of the population over the past three decades. (more…)
Imagine how a typical factory today operates in many advanced economies. There are no longer many workers lined up along assembly belts. Instead, there are only a few of them—mostly likely engineers—looking at screens of highly sophisticated equipment that does the assembly once done by humans. With technological advancement constantly driving down the cost of capital, firms are increasingly replacing workers with machines.
Productivity drives our living standards. In our April 2017 Fiscal Monitor, we show that countries can raise productivity by improving the design of their tax system, which includes both policies and administration. This would allow business reasons, not tax ones, to drive firms’ investment and employment decisions.
After being largely stable in many countries for decades, the share of national income paid to workers has been falling since the 1980s. Chapter 3 of the April 2017 World Economic Outlook finds that this trend is driven by rapid progress in technology and global integration.
Emerging Markets and Developing Economies: Sustaining Growth in a Less Supportive External Environment
By Bertrand Gruss, Malhar Nabar, and Marcos Poplawski-Ribeiro
It is quite likely you are reading this on a smartphone or tablet assembled in an emerging market economy. The beverage beside you could well be tea grown in Sri Lanka or Kenya. And there is a chance that you are —or soon will be—on a plane headed for Shanghai, Sao Paulo, or St. Petersburg.
Muna AbuSulayman is a Saudi Arabian media personality, whose television show, Kalam Nawaem, which means “soft talk” in Arabic, is the longest running and most popular social issues show in the Middle East. In this podcast, AbuSulayman discusses pushing social boundaries, including on topics such as gender equality. (more…)
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.
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?(more…)
Services, which already account for 50 percent of world income and 70 percent of employment, are also becoming an important part of international trade. Services exports—accounting for nearly one fourth of total exports—have come to play a central role in the global economy, thanks in large part to advances in technology. (more…)
Output per worker and total factor productivity have slowed sharply over the past decade in most advanced economies and many emerging and developing countries.
Even before the global financial crisis, productivity growth showed signs of slowing in many advanced economies. But in the aftermath of the crisis, there was a further, abrupt deceleration. (more…)