business cycle – IMF Blog

The Economic Scars of Crises and Recessions

IMFBlog2019-03-14T13:32:16-04:00March 21, 2018|

March 21, 2018

Version in 日本語 (Japanese), Português (Portuguese)

New study finds that all types of recessions lead to permanent losses in output and welfare (photo: Peshkov/iStock by GettyImages).

Economic recessions are typically described as short-term periods of negative economic growth. According to the traditional business cycle view, output moves up and down around its long-term upward trend and after a recession, it recovers to its pre-recession trend. Our new study casts doubt on this traditional view and shows that all types of recessions—including those arising from external shocks and small domestic macroeconomic policy mistakes—lead to permanent losses in output and welfare. […]

Getting into Higher Gear: Why Structural Reforms Are Critical for Revving Up Global Growth

IMFBlog2019-03-26T16:45:33-04:00July 25, 2016|

David Lipton 2016-1 By David Lipton

Versions in عربي (Arabic), Español (Spanish)

Almost a decade after the start of the global financial crisis, the world economy is still trying to achieve escape velocity. The IMF’s recent forecast for global growth is a disappointing 3.1 percent in 2016 and 3.4 percent in 2017. And the outlook remains clouded by increased economic and political uncertainty, including from the impact of the Brexit vote.

Policymakers have taken forceful macroeconomic policy action to support growth, such as fiscal stimulus and appropriately accommodative monetary policy. But a lasting recovery remains elusive. […]

Policy Interest Rates in Latin America: Moving to Neutral?

IMFBlog2017-04-15T14:00:42-04:00November 19, 2012|

Using our estimated neutral interest rates we find that current policy rates are close to their neutral level in several countries (Chile, Colombia, and Peru). For Brazil and Mexico we find that monetary policies remain stimulative (with actual interest rates below neutral). For other countries in the region our analysis suggests that Costa Rica, the Dominican Republic, Guatemala, Paraguay, and Uruguay have lower interest rates than their neutral level. However, these results should be viewed with caution given data limitations and weaker monetary policy transmissions.