Global Economy: Good News for Now but Trade Tensions a Threat
April 17, 2018
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Container ship in Colombo, Sri Lanka: the recent escalating tensions over trade present a growing risk to the global economy (photo: STRINGER/REUTERS/Newscom).
The world economy continues to show broad-based momentum. Against that positive backdrop, the prospect of a similarly broad-based conflict over trade presents a jarring picture.
Three months ago, we updated our global growth forecast for this year and next substantially, to 3.9 percent in both years. That forecast is being borne out by continuing strong performance in the euro area, Japan, China, and the United States, all of which grew above expectations last year. We also project near-term improvements for several other emerging market and developing economies, including some recovery in commodity exporters. Continuing to power the world economy’s upswing are accelerations in investment and, notably, in trade. Continue reading “Global Economy: Good News for Now but Trade Tensions a Threat” »
An Even-handed Approach to Crypto-Assets
April 16, 2018
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Healthcare companies are studying how to use the technology behind crypto assets to maintain confidential medical data (BSIphotos/Newscom).
The dizzying gyrations of crypto-assets such as Bitcoin invite comparisons with the tulip mania that swept Holland in the 17th century and the recent dot-com bubble. With more than 1,600 crypto-assets in circulation, it seems inevitable that many will not survive the process of creative destruction.
In my blog last month, I looked at the dark side of crypto-assets, including their potential use for money laundering and the financing of terrorism. Here, I want to examine the promise they offer. A judicious look at crypto-assets should lead us to neither crypto-condemnation nor crypto-euphoria. Continue reading “An Even-handed Approach to Crypto-Assets” »
Fiscal Rules: Make them Easy to Love and Hard to Cheat
By Xavier Debrun, Luc Eyraud, Andrew Hodge, Victor Lledo, Catherine Pattillo, Abdelhak Senhadji
April 13, 2018
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The national debt clock in New York City: a fiscal rule, like the debt ceiling, should not be set too low or too high. (photo: Frances M. Roberts/Newscom)
Rules to contain lavish government deficits are most effective if countries design them to be simple, flexible, and enforceable in the face of changing economic circumstances.
In new analysis, we look at fiscal rules in over 90 countries and, based on their experiences, find that the rules put in the place over the last three decades often were too complex, overly rigid, and difficult to enforce. Continue reading “Fiscal Rules: Make them Easy to Love and Hard to Cheat” »
The Digital Gamble: New Technology Transforms Fiscal Policy
By Vitor Gaspar and Geneviève Verdier
April 12, 2018
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Traffic in Singapore: the city uses digital technology for road pricing to manage road congestion congestion (photo: Kua Chee Siong/ SPH/Newscom)..
In Rwanda, digitally-monitored drones deliver blood supplies to hospitals. In Estonia, it takes five minutes to file taxes and 99 percent of government services are available online. Singapore was the first city to implement electronic road pricing to manage congestion. The world is becoming digital, and reliable, timely, and accurate information is available at the push of a button. Governments are following suit, using digital tools for tax and expenditure policy, public financial management, and public service delivery. Continue reading “The Digital Gamble: New Technology Transforms Fiscal Policy” »
Risky Business: Reading Credit Flows for Crisis Signals
By Claudio Raddatz Kiefer and Jérôme Vandenbussche
April 10, 2018
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The odds of a severe economic downturn are higher when a growing portion of credit flows to riskier firms, according to a new IMF study (Photo: Pali 137/ iStock by Getty Images).
Supervisors who monitor the health of the financial system know that a rapid buildup of debt during an economic boom can spell trouble down the road. That is why they keep a close eye on the overall volume of credit in the economy. When companies go on a borrowing spree, supervisors and regulators may decide to put the brakes on credit growth.
Trouble is, measuring credit volume overlooks an important question: how much of that additional money flows to riskier companies – which are more likely to default in times of trouble—compared with more creditworthy firms? The IMF’s latest Global Financial Stability Report seeks to fill that gap by constructing measures of the riskiness of credit allocation, which should help policy makers spot clouds on the economic horizon. Continue reading “Risky Business: Reading Credit Flows for Crisis Signals” »
For Home Prices in London, Check the Tokyo Listings
By Claudio Raddatz Kiefer and Jane Dokko
April, 10, 2018
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Hong Kong viewed from Victoria Peak. House prices across countries and cities are increasingly moving in tandem (Photo: Fraser Hall/Robert Harding/Newscom).
If house prices are rising in Tokyo, are they also going up in London?
Increasingly, the answer is yes.
In recent decades, house prices around the world have shown a growing tendency to move in the same direction at the same time. What accounts for this phenomenon, and what are the implications for the world economy? These are questions that IMF economists explore in Chapter 3 of the latest Global Financial Stability Report. Continue reading “For Home Prices in London, Check the Tokyo Listings” »
Wanted: Policies to Encourage and Enable Work in Advanced Economies
By Francesco Grigoli, Zsóka Kóczán, and Petia Topalova
April 9, 2018
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Aging may slow economic growth in advanced economies (photo: Zero Creatives Cultura/Newscom).
Population growth in advanced economies is slowing, life expectancy is rising, and the number of elderly people is soaring. Because older workers participate less in the labor market, the aging of the population could slow growth and, in many cases, threaten the sustainability of social security systems. But, as our research in Chapter 2 of the April 2018 World Economic Outlook shows, there is considerable scope for policies to mitigate the forces of aging by enabling those who are willing to work to do so. Continue reading “Wanted: Policies to Encourage and Enable Work in Advanced Economies” »
The Decline in Manufacturing Jobs: Not Necessarily a Cause for Concern
By Bertrand Gruss and Natalija Novta
April 9, 2018
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Textile manufacturing plant in Recife, Brazil: in many countries, the share of manufacturing jobs is declining (photo: Ingram Publishing/Newscom).
Manufacturing jobs are waning. In many emerging market and developing economies, workers are shifting from agriculture to services, bypassing the manufacturing sector. In advanced economies, the rise in service sector employment typically reflects the outright disappearance of manufacturing jobs. Continue reading “The Decline in Manufacturing Jobs: Not Necessarily a Cause for Concern” »
Globalization Helps Spread Knowledge and Technology Across Borders
By Aqib Aslam, Johannes Eugster, Giang Ho, Florence Jaumotte, Carolina Osorio-Buitron, and Roberto Piazza
April 9, 2018
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Using artificial intelligence at a hospital in Qingdao, China: the spread of knowledge and technology between countries has intensified (photo: Sipa Asia/Sipa USA/Newscom).
It took 1,000 years for the invention of paper to spread from China to Europe. Nowadays, in a world that has become more integrated, innovations spread faster and through many channels.
Our research in Chapter 4 of the April 2018 World Economic Outlook takes a closer look at how technology travels between countries. We find that the spread of knowledge and technology across borders has intensified because of globalization. In emerging markets, the transfer of technology has helped to boost innovation and productivity even in the recent period of weak global productivity growth. Continue reading “Globalization Helps Spread Knowledge and Technology Across Borders” »
Chart of the Week: Malaysia Needs More Women in the Workforce
By IMFBlog
April 2, 2018
Version in baˈhasa indoneˈsia (Indonesian)
Four students walk past a bank in Kuala Lumpur, Malaysia: Policies like improving the quality of education can help the country increase the number of women in the workforce (photo: John Mulligan/iStock by Getty Images).
Malaysia, a country well on its way to achieving high income status, can increase the number of women in the labor force by implementing key labor market reforms. And the country should, because our research shows that more women in the workforce benefits the economy. Continue reading “Chart of the Week: Malaysia Needs More Women in the Workforce” »
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