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Inequality: Fiscal Policy Can Make the Difference

By Vitor Gaspar and Mercedes Garcia-Escribano

 October 11, 2017

Versions in عربي (Arabic),  Español (Spanish), Français (French), 日本語 (Japanese), Русский (Russian)

Wealth and poverty side-by-side in Rio de Janeiro, Brazil: inequality is rising within countries around the world (photo: Jean-Marc David/SIPA/Newscom). 

Income inequality among people around the world has been declining in recent decades. This is due to countries like China and India’s incomes catching-up to advanced economies. But the news is not all good. Inequality within countries has increased, particularly in advanced economies. Since the global economic recovery has gained pace and is now widespread, policymakers have a window of opportunity to respond with reforms that tackle inequality, and our new Fiscal Monitor shows how the right mix of fiscal policies can make the difference.

Continue reading “Inequality: Fiscal Policy Can Make the Difference” »

By | October 11th, 2017|Advanced Economies, Annual Meetings, developing countries, Economic outlook, Economic research, education, Emerging Markets, Fiscal policy, Government, health, income, Inequality, International Monetary Fund, taxation|
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Central, Eastern, and Southeastern Europe: Harnessing the Power of Good Governance

By Poul Thomsen

July 27, 2017

Dubrovnik, Croatia. Countries in the region should continue working on good governance for higher growth (photo: Album/Prisma/Newscom)

In many ways, Central, Eastern, and Southeastern Europe is an incredible success story. In less than a generation, countries moved from centrally-planned economies to market-based ones—transforming their legal systems, public administrations, and economic policies, to name a few key elements. Yet, for the sake of higher growth in the future, countries need to continue enhancing institutions and good governance.

Enhancing institutions and good governance—the efficient governing of a country—remains at the core of the reform agenda to raise prosperity to advanced European living standards. Many countries have joined the European Union, a vital anchor toward these goals, and others are aspiring to join. Continue reading “Central, Eastern, and Southeastern Europe: Harnessing the Power of Good Governance” »

By | July 27th, 2017|capital markets, euro zone, Europe, Financial Crisis, Global Governance, growth, inclusive growth, income, International Monetary Fund, labor markets, productivity, taxation|
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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.|
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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|
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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|
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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|
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