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

maury-obstfeld-imfBy Maurice Obstfeld

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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. (more…)

Keeping Asia from Overheating

Asia’s vigorous pace of growth has seen the region play a leading role in the global recovery. But there are signs that higher commodity prices are spilling over to a more generalized increase in inflation. Expectations of future inflation have picked up. And accommodative macroeconomic policy stances, coupled with limited slack in some economies, have added to inflation pressures. Against this backdrop, the need for policy tightening in Asia has become more pressing than it was six months ago, especially in economies that face generalized inflation pressures. How should policymakers address these challenges?

By | May 19th, 2011|Asia, Economic outlook, IMF, International Monetary Fund|5 Comments

Latin America: Making the Good Times Better

Latin America has enjoyed tremendous economic dynamism and a rising quality of life over the past decade. But the region’s transformation is not yet complete. Leaders across the region should capitalize on today’s favorable conditions, transforming their countries to the next level, and ensuring that the benefits of growth are more widely shared. The question is: how best to do that? As I travel through the region next week—visiting Panama, Uruguay, and Brazil—I’m looking forward to hearing the views of government officials, parliamentarians, and university students on the key challenges facing their countries today.

“Combination of Worries” Gets Attention in Davos

Europe’s sovereign debt crisis, fiscal challenges in advanced economies, concerns about overheating in emerging market countries, and the impact of rising food prices. These are the hot topics at this year’s World Economic Forum in Davos, Switzerland, and a clear sign of the tensions and risks as the global economy recovers. In an interview from Davos, the IMF’s First Deputy Managing Director John Lipsky tells us that, with the return of global growth, the mood is certainly more optimistic than it was a year or two ago. But there is also a clear sense among delegates that this has not solved some of the world’s important economic problems.

Sustaining Asia’s Recovery

I am in Asia this week to launch our October 2010 Regional Economic Outlook: Asia and Pacific (REO) in Jakarta and Singapore. As I have inevitably found during visits to Asia over so many years, the mood here is confident about future economic prospects. Yet it is also watchful for risks that may be lurking over the horizon. This mood matches closely the main messages of our current assessment of the outlook for the region. In the first of several blogs posts from the region, here I reflect on the self-sustaining recovery under way across Asia, the risk external risk factors and, the pressing issue for Asian policymakers, policy options for managing the tide of large capital inflows.

By | October 21st, 2010|Asia, Economic outlook, IMF, International Monetary Fund|0 Comments
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