Beware of Strike-it-Rich Euphoria: the Curse of Potential Oil Wealth
By IMFBlog
March 9, 2018
(photo: Nielubieklonu/iStock).
The resource curse, or paradox of plenty, is when countries with an abundance of natural resources suffer stagnant economic growth or even contraction.
In this podcast, World Bank economist James Cust, says the problem of eradicating extreme poverty is going to be about how resource-rich countries manage their resource wealth. Continue reading “Beware of Strike-it-Rich Euphoria: the Curse of Potential Oil Wealth” »
Welfare Versus GDP: What Makes People Better Off
By Geoffrey Bannister and Alexandros Mourmouras
March 7, 2018
Oslo, Norway. In rich countries like Norway, that have greater life expectancy, more leisure, and lower inequality, measured well-being is higher than income (photo: iStock by Getty Images).
For years, economists have worked to develop a way of measuring general well-being and comparing it across countries. The main metric has been differences in income or gross domestic product per person. But economists have long known that GDP is an imperfect measure of well-being, counting just the value of goods and services bought and sold in markets.
The challenge is to account for non-market factors such as the value of leisure, health, and home production, such as cleaning, cooking and childcare, as well as the negative byproducts of economic activity, such as pollution and inequality. Continue reading “Welfare Versus GDP: What Makes People Better Off” »
Ending Harassment Helps #TheEconomyToo
By Christine Lagarde, Corinne Deléchat, and Monique Newiak
March 5, 2018
Versions in عربي (Arabic), 中文 (Chinese), Español (Spanish), Français (French), 日本語 (Japanese), Português (Portuguese)
Women who live in countries with stronger protection against harassment, including at work, are more likely to open a bank account, borrow and save, and use financial services such as mobile payments (iStock by Getty Images).
This International Women’s Day is bringing new calls to #pressforprogress on gender parity. Giving women and girls the opportunity to succeed is not only the right thing to do—it can also transform societies and economies.
Unlocking this transformative potential means pushing for more equal opportunities: for example, equality in legal rights for men and women, and equality in access to education, health, and finance. Just as important is the fundamental issue of ensuring a safe environment for all, including protection against harassment. Continue reading “Ending Harassment Helps #TheEconomyToo” »
The Struggle to Manage Debt
March 1, 2018
Good economic times offer an opportunity to tackle budget deficits
The global economy has a spring in its step. Growth is picking up, and we at the IMF have been ratcheting up our forecasts. Government coffers are filling and, with more people at work, demand for public social support is receding. The fiscal woes of the past decade seem behind us.
But this sunny perspective ignores debt levels that remain close to historic highs and the inevitable end of the cyclical upswing. Estimates of underlying growth potential have hardly budged, and interest rates—the cost of servicing all this debt—are starting to rise, which will eventually make it harder to refinance bonds and loans. Continue reading “The Struggle to Manage Debt” »
Money Sent Home by Migrants Buffers Income Shocks
By Kimberly Beaton, Luis Catão and Zsoka Koczan
February 28, 2018
Western Union, Singapore: In 2015, migrants sent home $441 billion – almost three times the total value of official development assistance (photo: iStock by GettyImages).
Worldwide, 250 million people, or 3 percent of the global population, live outside their country of birth. Many of these migrants maintain strong ties with their home countries, sending part of their incomes to families back home. In 2015, migrants sent home $441 billion – almost three times the total value of official development assistance.
About 45 percent of these remittances flow from advanced economies to emerging market and developing economies. These funds have the potential to be an important mechanism for sharing income risks on a global scale. That is, if a family living in a developing country loses part of its income, higher remittances from relatives abroad could help compensate. Continue reading “Money Sent Home by Migrants Buffers Income Shocks” »
Chart of the Week: China’s Thrift, and What to Do About It
February 26, 2018
By IMFBlog
A pedestrian walks in front of a branch of the Postal Savings Bank of China in Nanjing. China’s saving rate is one of the world’s highest (photo: Imagine China/Newscom).
What makes China’s citizens so thrifty, and why does that matter for China and the rest of the world? The country’s saving rate, at 46 percent of GDP, is among the world’s highest. Households account for about half of savings, with corporations and the government making up the rest.
Saving is good, right? Up to a point. But too much saving by individuals can be bad for society. That’s because the flip side of high savings is low consumption and low household welfare. High savings can also fuel excessive investment, resulting in a buildup of debt in China. And because people in China save so much, they buy fewer imported goods than they sell abroad. That contributes to global imbalances, according to a recent IMF paper, China’s High Savings: Drivers, Prospects, and Policies. The country’s authorities are aware of the issue and are taking steps to address it. Continue reading “Chart of the Week: China’s Thrift, and What to Do About It” »
A Digital-Savvy Indonesia
By Tidiane Kinda and Ting Yan
February 22, 2018
Version in 中文 (Chinese), baˈhasa indoneˈsia (Indonesian)
A salesperson shows a customer the latest smartphones in a showroom in Jakarta, Indonesia: the use of mobile internet services continues to grow rapidly in the country (photo: Beawhiharta/Reuters/ /Newscom).
With the third largest youth population in the world and 130 million active social media users, Indonesia is poised to become the biggest digital economy country in Southeast Asia. To fully embrace the digital opportunity, Indonesia must enhance its infrastructure and increase internet penetration to lift economic growth and productivity.
According to a McKinsey report, digitization could expand Indonesia’s economy by 10 percent of GDP and add 3.7 million jobs by 2025. Continue reading “A Digital-Savvy Indonesia” »
Communications Can Help to Get Financial Stability Off the Ground
February 22, 2018
Versions in 中文 (Chinese), Español (Spanish), Português (Portuguese), Русский (Russian)
Policy and communications—two wings to fly to success (photo: iStock by Getty Images).
When the capacity to communicate effectively on financial stability policies is not there, it is like trying to fly a plane with one wing missing. It takes more than sound policy making. Communications is an essential part of the job.
Following the global financial crisis, many countries redoubled their efforts to build stronger financial stability frameworks. Central banks and supervisory agencies have enhanced their capacity to identify and monitor systemic risks in the financial system and have developed new policies to mitigate them. Continue reading “Communications Can Help to Get Financial Stability Off the Ground” »
The Euro Area Needs a Fiscal Union
By Helge Berger, Giovanni Dell’Ariccia, and Maurice Obstfeld
February 21, 2018
Version in Français (French)
Without more tangible elements of a fiscal union, the euro area will remain fundamentally vulnerable to shocks. (photo: iStock by GettyImages) .
The euro area is experiencing a robust recovery, but the architecture supporting Europe’s currency union remains incomplete and leaves the region vulnerable to future financial crises.
While substantial progress has been made to address some architectural issues—conditional lending facilities and key elements of a banking union—we argue in our recent paper that the euro area needs to build elements of a common fiscal policy, including more fiscal risk sharing, to preserve financial and economic integration and stability. Without some degree of fiscal union, the region will continue to face existential risks that policymakers should not ignore. While this is not a new topic, the current favorable economic climate might be the moment to advance the discussion—and the chance to strengthen the euro area. Continue reading “The Euro Area Needs a Fiscal Union” »
Sub-Saharan Africa: Diversifying for Tomorrow
By IMFBlog
February 16, 2018
Photo: iStock by Getty Images/subman
Countries in sub-Saharan Africa need to diversify their economies, and the region’s youth need to be at the heart of it, says Axel Schimmelpfennig.
Schimmelpfennig is head of the IMF team for Uganda, and a coauthor of a study that looks at the potential benefits of a stepped-up diversification agenda in sub-Saharan Africa.
In this podcast, Schimmelpfennig talks about the need for sub-Saharan Africa to increase productivity in areas like agriculture and manufacturing to become more competitive in the export market and allow for increasing wages. Continue reading “Sub-Saharan Africa: Diversifying for Tomorrow” »
Other IMF Blogs
