The Policymaker’s Trilemma

2021-11-05T09:50:54-04:00May 12, 2021|

By Abebe Aemro Selassie and Andrew Tiffin

中文, EspañolFrançais日本語Português, Русский

Imagine you’re a policymaker in sub-Saharan Africa. You’ve been charged with lifting your country out of the worst health crisis in living memory, and nobody around you knows when it will end—the second wave that gripped the region earlier in the year has eased, but many countries are nonetheless bracing for further waves as winter approaches. […]

The Digital Accelerator: Revving Up Government in Asia

2019-03-13T13:58:38-04:00September 26, 2018|

By Vitor Gaspar and Chang Yong Rhee

September 26, 2018

عربي, 中文, Español, 日本語,  Português, Русский,

A driver from the Malaysian ride-hailing tech startup, Grab, picks up a passenger in Jakarta, Indonesia: digitalization is transforming Asia’s businesses and governments (photo: Afif C. Kasuma/iStock by Getty Images)

Asia’s digital revolution shows no signs of slowing down. From e-commerce giants like China’s Alibaba and Japan’s Rakuten, to ride-hailing, and digital payment tech startups, like Indonesia’s Go-Jek and India’s Paytm, and the widespread use of industrial robots for manufacturing, digitalization is changing the way the region’s businesses operate. […]

The Global Expansion: Still Strong but Less Even, More Fragile, Under Threat

2019-03-14T09:28:49-04:00July 16, 2018|

By Maurice Obstfeld

July 16, 2018

Versions in عربيBaˈhasa indoneˈsia中文EspañolFrançais日本語PortuguêsРусский 

The escalation of trade tensions is the greatest near-term threat to global growth (photo: wildpixel/Getty Images by iStock)

Amid rising tensions over international trade, the broad global expansion that began roughly two years ago has plateaued and become less balanced. […]

Economic Preparedness: The Need for Fiscal Space

2019-03-14T10:06:20-04:00June 27, 2018|

By Vikram Haksar, Marialuz Moreno-Badia, Catherine Pattillo and Murtaza Syed

June 27, 2018

Versions in عربي中文Baˈhasa indoneˈsia,  日本語Português

Countries must assess the amount of room in their budgets for increasing spending or cutting taxes (photo: Martin Barraud/iStock by Getty Images)

How much leeway national policymakers have for increasing spending or cutting taxes has been hard to assess. […]

Fiscal Rules: Make them Easy to Love and Hard to Cheat

2019-03-14T12:32:58-04:00April 13, 2018|

By Xavier Debrun, Luc Eyraud, Andrew Hodge, Victor Lledo, Catherine Pattillo, Abdelhak Senhadji

April 13, 2018

Versions in Español (Spanish), Français (French),  Português  (Portuguese)

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. […]

Beware of Strike-it-Rich Euphoria: the Curse of Potential Oil Wealth

2019-03-15T09:41:05-04:00March 9, 2018|

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. […]

The Struggle to Manage Debt

2019-03-14T15:22:45-04:00March 1, 2018|

By Christoph Rosenberg

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. […]

Chart of the Week: China’s Thrift, and What to Do About It

2019-03-15T10:18:30-04:00February 26, 2018|

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 […]

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