Economic Recovery

Chart of the Week: Central and Eastern Europe Close the Gap

May 22, 2017

Version in Русский (Russian)

Most of the countries of Central, Eastern, and Southeastern Europe will see their economies humming away at a strong growth rate in 2017. A measure of their success at fully utilizing their economic machine is the output gap—the difference between what the economy is currently producing, and what it can produce when it is at full capacity.

Our Chart of the Week from a recently published report on the Central, Eastern, and Southeastern European region shows how close these economies come to performing at full potential. Continue reading “Chart of the Week: Central and Eastern Europe Close the Gap” »

By IMFBlog| May 22nd, 2017|Economic research, Europe, growth, IMF, inflation, Investment, jobs, labor markets, trade, wages|

The Whole Can Be Greater Than the Sum of its Parts

By Vitor Gaspar, Maurice Obstfeld and Ratna Sahay

There are policy options to bring new life into anemic economic recoveries and to counteract renewed slowdowns. Our new paper, along with our co-authors, debunks widespread concerns that little can be done by policymakers facing a vicious cycle of (too) low growth, (too) low inflation, near-zero interest rates, and high debt levels.

Continue reading “The Whole Can Be Greater Than the Sum of its Parts” »

By IMFBlog| September 28th, 2016|capital markets, Economic research, Fiscal policy, Government, IMF, International Monetary Fund, Reform, Uncategorized|

Ten Take Aways from the "Rethinking Macro Policy: Progress or Confusion?"

By Olivier Blanchard

On April 15-16, the IMF organized the third conference on "Rethinking Macro Policy."

Here are my personal take aways.

1. What will be the "new normal"?

I had asked the panelists to concentrate not on current policy challenges, but on challenges in the "new normal." I had implicitly assumed that this new normal would be very much like the old normal, one of decent growth and positive equilibrium interest rates. The assumption was challenged at the conference.

On the one hand, Ken Rogoff argued that what we were in the adjustment phase of the “debt supercycle.” Such financial cycles, he argued, end up with debt overhang, which in turn slows down the recovery and requires low interest rates for some time to maintain sufficient demand. Under that view, while it may take a while for the overhang to go away, more so in the Euro zone than in the United States, we should eventually return to something like the old normal.

Continue reading “Ten Take Aways from the "Rethinking Macro Policy: Progress or Confusion?"” »

By IMFBlog| May 1st, 2015|Advanced Economies, Asia, Economic Crisis, Economic outlook, Emerging Markets, Europe, Financial Crisis, Fiscal policy, Globalization, growth, IMF, International Monetary Fund, Multilateral Cooperation, Politics, Reform, Uncategorized|

Banks Should Help, Not Hinder the Economy

By Will Kerry and Andrea Maechler

Banks are struggling to overhaul the way they do business given new realities and new regulations adopted in the aftermath of the global financial crisis. While banks are generally stronger—they have more capital—they are less profitable, as measured by the return on equity. There are a number of reasons behind this, including: anemic net income at banks, particularly in the euro area; higher levels of equity; and banks taking fewer risks.

If they cannot change their business models, there is a risk that banks will not be able to provide enough credit to help the economy grow and recover.

Continue reading “Banks Should Help, Not Hinder the Economy” »

By IMFBlog| October 20th, 2014|Advanced Economies, Economic research, Europe, Finance, Financial Crisis, Financial regulation, growth, IMF, International Monetary Fund, Reform, Uncategorized|

The New Global Imbalance: Too Much Financial Risk-Taking, Not Enough Economic-Risk Taking

By José Viñals

(Versions in Español, 中文)

I have three key messages for you today:

1. Policymakers are facing a new global imbalance: not enough economic risk-taking in support of growth, but increasing excesses in financial risk-taking posing stability challenges.

2. Banks are safer but may not be strong enough to vigorously support the recovery. And risks are shifting to the shadow banking system in the form of rising market and liquidity risks. If left unaddressed, these risks could compromise global financial stability.

3. In order to address this new global imbalance, we must promote economic risk-taking by improving the transmission of monetary policy to the real economy. And we must address financial excesses through better micro- and macroprudential policies.

Continue reading “The New Global Imbalance: Too Much Financial Risk-Taking, Not Enough Economic-Risk Taking” »

By IMFBlog| October 8th, 2014|Advanced Economies, Asia, Emerging Markets, Finance, Financial Crisis, IMF, International Monetary Fund, Investment, Politics, Reform, Uncategorized|

More Jobs That Pay Decent Wages: How To Fight Poverty In The United States

By Deniz Igan

(Version in Español)

Something unusual happened this year. For the first time in almost ten years, a book by an economist made it to Amazon’s Top 10 list. Thomas Piketty’s Capital in the Twenty-First Century captured the attention of people from all walks of life because it echoed what an increasing number of Americans have been feeling: the rich keep getting richer and poverty in America is a mainstream problem.

The numbers illustrate the troubling reality. According to the U.S. Census Bureau, 1 in 6 Americans—almost 50 million people—are living in poverty. Recent research documents that nearly 40 percent of American adults will spend at least one year in poverty by the time they reach 60. During 1968–2000, the risk was less than 20 percent. More devastatingly, 1 in 5 children currently live in poverty and, during their childhood, roughly 1 in 3 Americans will spend at least one year living below the poverty line.

Continue reading “More Jobs That Pay Decent Wages: How To Fight Poverty In The United States” »

By IMFBlog| August 28th, 2014|Advanced Economies, Economic outlook, Economic research, Employment, Financial Crisis, Globalization, IMF, International Monetary Fund, Investment, Reform, Uncategorized, unemployment|

The Slow Recovery Continues

By Olivier Blanchard

(Versions in Español, 中文, 日本語, Русский )

The recovery continues, but it remains weak, indeed a bit weaker than we forecast in April.

We have revised our forecast for world growth in 2014 from 3.7 percent in April to 3.4 percent today. This headline number makes things look worse than they really are. To a large extent, it reflects something that has already happened, namely the large negative US growth rate in the first quarter. But it is not all due to that. It also reflects a number of small downward revisions, both in advanced and in emerging economies.

The overall story remains largely the same as before:

Advanced economies are still confronted with high levels of public and private debt, which act as brakes on the recovery. These brakes are coming off, but at different rates across countries.

Emerging markets are slowing down from pre-crisis growth rates. They have to address some of their underlying structural problems, and take on structural reforms. At the same time, they have to deal with the implications of monetary policy normalization in the US.

Let me take you on the usual tour of the world.

Continue reading “The Slow Recovery Continues” »

By IMFBlog| July 24th, 2014|Advanced Economies, Asia, Economic outlook, Economic research, Emerging Markets, Europe, Financial Crisis, growth, International Monetary Fund, Latin America, Reform, Uncategorized|

Reduced Speed, Rising Challenges: IMF Outlook for Latin America and the Caribbean

By Alejandro Werner

(Version in Español and Português)

The prospects for global growth have brightened in recent months, led by a stronger recovery in the advanced economies. Yet in Latin America and the Caribbean, growth will probably continue to slow, although some countries will do better than others. We analyze the challenges facing the region in our latest Regional Economic Outlook and discuss how policymakers can best deal with them.

Continue reading “Reduced Speed, Rising Challenges: IMF Outlook for Latin America and the Caribbean” »

By IMFBlog| April 25th, 2014|Advanced Economies, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Financial Crisis, growth, IMF, International Monetary Fund, Public debt, Uncategorized|

Public Finances Are on the Mend, but No Clean Bill of Health

By Sanjeev Gupta and Martine Guerguil

(Version in Español Français, Русский, 中文, and 日本語)

We’ve had a spate of good news on the economic front recently. Does this mean that we are finally out of the fiscal woods? According to our most recent Fiscal Monitor report, not yet, as public debt remains high and the recovery uneven.

First, the good news. The average deficit in advanced economies has halved since the 2009 peak. The average debt ratio is stabilizing. Growth is strengthening in the United States and making a comeback in the euro area, and should benefit from the slower pace of consolidation this year. Emerging markets and developing countries have maintained their resilience, in part thanks to the policy buffers accumulated in the pre-crisis period. Talks of tapering in the United States have left a few of them shaken, but not (quite) stirred.

But there is still some way to go. The average debt ratio in advanced economies, although edging down, sits at historic peaks, and we project it will still remain above 100 percent of GDP by 2019 (Chart 1). The recovery is still vulnerable to several downside risks, including those stemming from the lack of clear policy plans in some major economies. The recent bouts of financial turmoil have raised concerns that the anticipated tightening of global liquidity could expose emerging markets and low-income countries to shifts in investor sentiment and more demanding debt dynamics.

Continue reading “Public Finances Are on the Mend, but No Clean Bill of Health” »

By IMFBlog| April 9th, 2014|Advanced Economies, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Finance, Financial Crisis, Fiscal policy, growth, International Monetary Fund, Low-income countries, Uncategorized|

Jobs and Growth in Europe

The IMF’s Christine Lagarde is in Brussels on January 28 to talk about jobs and growth in Europe.

The good news is growth is finally picking up in the euro area as it is slowly emerging from the deep recession. But nearly 20 million people are unemployed.

The most effective way of boosting jobs is to get growth going again.

The IMF has a new book that analyzes today's challenges head-on and proposes a roadmap for the continent's recovery.

Christine Lagarde will discuss the book along with Wolfgang Schäuble, Finance Minister of Germany, and Luis de Guindos, Minister of Economy and Competitiveness of Spain. The event will be chaired by Fabian Zuleeg, Chief Executive of the European Policy Centre.

Watch the live webstream on this page from 8.00-9.30 a.m. (Central European Time).

By IMFBlog| January 24th, 2014|Advanced Economies, Economic research, Employment, Financial Crisis, growth, International Monetary Fund, Uncategorized|

Load More Posts

Categories