Private Debt to Weigh on Global Economic Recovery
A record rise in private debt could slow the economic recovery, but the drag on growth will vary across countries and within them.
To Tackle Housing Affordability in Canada, Build More Houses
By Michal Andrle, Cheng Hoon Lim and Troy Matheson
Policymakers across the world worry about affordable housing. […]
Chart of the WeekCanada’s Housing Market Slowdown
By IMFBlog
Following a period of escalating prices, Canada’s housing market is cooling. Measures designed to strengthen financial stability such as more stringent tests of borrowers’ ability to repay their loans, along with higher interest rates, combined to make mortgage financing more expensive. […]
Top Ten Blogs of 2017
December 28, 2017
Read the top ten blogs of 2017 (photo: Times Square- New York-Pacific Press/SipaUSA/Newscom)
We have all had quite the year. Our readers’ interests in 2017 focused on topics that affect how people live their lives: why wages are low, rising income and wealth inequality, household debt, climate change, and the scourge of corruption, to name a few.
As we wrap up the highs and lows of 2017 and get ready for whatever 2018 has in store, here is the list of the top ten blogs of the year based on readership. From all the elves editors at IMFBlog, we wish you a year of peace and interesting reads.
Financial Stability Improves, But Rising Vulnerabilities Could Put Growth at Risk
October 11, 2017
Versions in Versions in عربي (Arabic), 中文 (Chinese), Español (Spanish), Français (French). 日本語 (Japanese), Русский (Russian)
The headquarters of the European Central Bank in Frankfurt, Germany: To avoid causing market turbulence, central banks will have to clearly communicate their plans to gradually unwind crisis-era policies (photo: Caro/Sven Hoffman/Newscom).
It seems like a paradox. The world’s financial system is getting stronger, thanks to healthy economic growth, buoyant markets, and low interest rates. Yet despite these favorable conditions, dangers in the form of rising financial vulnerabilities are starting to loom. That is why policymakers should act now to keep those vulnerabilities in check. […]
What We Have Seen and Learned 20 Years After the Asian Financial Crisis
July 13, 2017
Versions in عربي (Arabic), Bahasa (Indonesia), 中文 (Chinese), Español (Spanish), Français (French),
日本語 (Japanese), Русский (Russian)
A trader in Seoul, South Korea: Asia is the largest contributor to global growth (photo: Ryu Seung-il/Polaris/Newscom)
Asia today is the fastest-growing region in the world, and the largest contributor to global growth. It has six members of the Group of Twenty advanced and emerging economies, and its economic and social achievements are well recognized.
But 20 years ago, July 1997 marked the beginning of the Asian Financial Crisis, when a combination of economic, financial and corporate problems triggered a sharp loss of confidence and capital outflows from the region’s emerging market economies. The crisis began in Thailand on July 2, when the baht’s peg to the dollar was dropped, and eventually spread to Korea, Indonesia and other countries. […]
Chart of the Week: Norway’s Home-Price Boom
By IMFBlog
July 10, 2017
A crane looms over the city of Oslo, Norway: Constraints on new construction limit the supply of housing, driving up prices (photo: Ingram Publishing/Newscom)
Think Londoners and New Yorkers have it bad when it comes to sky-high house prices? Residents of Oslo have reason to gripe, too.
House prices in the Norwegian capital are among the world’s highest, as measured by the average cost of a home relative to household median income. Prices in Oslo are perhaps the most visible symptom of a real estate boom across the oil-rich, Nordic nation of 5.2 million people.
Monetary Policy and Financial Stability: Canada’s House-Price Dilemma
(Version in Français)
Canada’s housing market is sizzling hot and the Bank of Canada has a monetary policy dilemma: increase interest rates to cool the housing market would hurt borrowers and the economy; keep interest rates low adds fuel to the borrowing that led to the rise in housing prices and in household debt. What to do?
Cross-Country Analysis of Housing Finance and Real Estate Booms
By Eugenio Cerutti, Jihad Dagher, and Giovanni Dell’Ariccia
Housing finance—considered one of the villains of the recent global financial crisis—was seen, at least until recently, as a vehicle for economic growth and social stability. Broader access to housing finance promotes home ownership, especially for younger and poorer households; which in turn is often linked to social stability, and ultimately economic growth.
But real-estate boom episodes have often ended in busts with dire economic consequences, especially when the boom was financed through fast credit growth. Several countries have seen these boom-bust patterns over the last decade, particularly in some of the hardest hit countries during the global financial crises, such as Ireland, Spain, and the United States. Despite having different mortgage market structures, these three countries saw an astonishing increase in house prices and construction on the back of risky lending which was followed by a painful adjustment period—a mortgage credit boom gone bad.
A Missing Piece In Europe’s Growth Puzzle
Even before the latest euro area GDP numbers and Italian elections cast a shadow over the continent, economists were struggling to reconcile the steady improvement in market sentiment with the more downbeat data on the economy, production, orders, and jobs.
This video looks at this puzzle from a somewhat different perspective than the usual— we examine the role of household and corporate balance sheets in the countries under financial market stress and the implications for policy priorities.