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A Shifting U.S. Policy Mix: Global Rewards and Risks

maury-obstfeld-imfBy Maurice Obstfeld

Version inعربي (Arabic),  中文 (Chinese), Français (French), 日本語 (Japanese), Русский (Russian), and Español (Spanish)

After a year marked by financial turbulence, political surprises, and unsteady growth in many parts of the world, the Fed’s decision this month to raise interest rates for just the second time in a decade is a healthy symptom that the recovery of the world’s largest economy is on track.

The Fed’s action was hardly a surprise: markets had for weeks placed a high probability on last week’s move. But market developments preceding the Fed decision did surprise many market watchers. Continue reading “A Shifting U.S. Policy Mix: Global Rewards and Risks” »

By | December 20th, 2016|Advanced Economies, Emerging Markets, Fiscal policy, Government, growth, International Monetary Fund, U.S.|0 Comments
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Meeting Rising Pressures to Address Income Inequality—A User’s Guide

By Sanjeev Gupta and Michael Keen

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

These are difficult times for ministers of finance. Fiscal constraints are tight and raising economic growth a priority. At the same time, income inequality is on the rise, and so is public pressure for governments to do something about it through their tax and spending policies. What’s a minister to do? How can he or she meet these seemingly incompatible demands?

A new IMF paper provides some guidance. Governments, of course, will have their own equity objectives. What the paper aims to do is look at precisely how countries can achieve their distributional goals—whatever they are—at the least possible cost to (and maybe even increasing) economic efficiency. This can help achieve sustainable growth and, in many cases, lead to fiscal savings. An earlier study by IMF researchers found that on average, fiscal redistribution has been associated with higher growth, because it helps reduce inequality.

Continue reading “Meeting Rising Pressures to Address Income Inequality—A User’s Guide” »

By | March 19th, 2014|Advanced Economies, Economic research, Employment, Fiscal policy, IMF, Inequality, International Monetary Fund, Uncategorized|1 Comment
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Resolutions for the Fiscal New Year—Staying on Track Is No Easy Task

We're one month into 2013, and if past experience is any guide, by now many people will have all but forgotten the promises they made about the things they planned to do over the coming year. But unlike many of these resolutions, the ones made by most advanced economies to reduce their 2012 fiscal deficits were by and large kept.

By | February 4th, 2013|Advanced Economies, Economic Crisis, Emerging Markets, Europe, Fiscal policy, growth, IMF, International Monetary Fund, Public debt|2 Comments
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Post-Crisis: What Should Be the Goal of a Fiscal Exit Strategy?

One obvious fallout of the global financial crisis is a huge deterioration in fiscal conditions, particularly in advanced countries. The numbers are nothing short of staggering. Gross general government debt in the G-20 advanced economies is projected to approach 120 percent of GDP by 2014, up from about 80 percent in 2007, and this is even assuming no renewal of fiscal stimulus beyond 2010.

By | November 16th, 2009|Economic Crisis, Financial Crisis, Fiscal Stimulus, IMF|2 Comments
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