Beheading the Hydra: How the IMF Fights Corruption

By Alistair Thomson 

May 18, 2017 

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

Corruption drains public resources and drags down economic growth in multiple ways (photo: dareknie/iStock by Getty Images)

Corruption—the abuse of public office for private gain—is a many-headed monster. It is pervasive in many countries, but only a fraction of cases make headlines; fewer are successfully prosecuted. Yet the cumulative burden is massive. By some estimates, bribery alone amounts to $1 trillion each year, and corruption more broadly to much more. While the precise figures are the subject of debate, the importance of the problem is not. Continue reading “Beheading the Hydra: How the IMF Fights Corruption” »

Inclusive Growth and the IMF

prakash-loungani-128x112-72By Prakash Loungani

Versions in 中文 (Chinese), Français (French), and Español (Spanish)

Four years ago, at the World Economic Forum in Davos, IMF Managing Director Christine Lagarde warned of the dangers of rising inequality, a topic that has now risen to the very top of the global policy agenda.

While the IMF’s work on inequality has attracted the most attention, it is one of several new areas into which the institution has branched out in recent years. A unifying framework for all this work can be summarized in two words: Inclusive growthContinue reading “Inclusive Growth and the IMF” »

By | January 24th, 2017|Economic research, Globalization, growth, IMF, Inequality|0 Comments

The World’s Three-Speed Economic Recovery

WEOBy Olivier Blanchard

(Versions in عربي , 中文, 日本語, Русский, and Español)

The main theme of our latest outlook is one that you have now heard for a few days: we have moved from a two-speed recovery to a three-speed recovery.

Emerging market and developing economies are still going strong, but in advanced economies, there appears to be a growing bifurcation between the United States on the one hand, and the Euro area on the other.

This is reflected in our forecasts. Growth in emerging market and developing economies is forecast to reach 5.3% in 2013, and 5.7% in 2014. Growth in the United States is forecast to be 1.9% in 2013, and 3.0% in 2014. In contrast, growth in the Euro area is forecast to be -0.3% in 2013, and only 1.1% in 2014.

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Africa’s Growth Puzzle: Better Ways to Fill Infrastructure Gaps

The issue of reviving or maintaining economic growth is a the forefront of policymakers’ minds all around the world. Of course, the policies needed to achieve that differ from region-to-region, country-to-country. For many countries in Africa, weak infrastructure is an obstacle to raising growth. In a recent interview with the IMF’s Survey online magazine, Andrew Berg of the IMF’s Research Department (and one of our contributing bloggers) discusses how Africa can step up investment in its infrastructure by augmenting traditional sources of financing with foreign borrowing and private investment.

By | February 28th, 2012|Africa, Economic research, growth, IMF, LICs, Low-income countries, recession|0 Comments

Fiscal Adjustment: Too Much of a Good Thing?

The IMF has argued for some time that the very high public debt ratios in many advanced economies should be brought down to safer levels through a gradual and steady process. Doing either too little or too much both involve risks: not enough fiscal adjustment could lead to a loss of market confidence and a fiscal crisis, potentially killing growth; but too much adjustment will hurt growth directly. At times over the last couple of years we called on countries to step up the pace of adjustment when we thought they were moving too slowly. Instead, in the current environment, I worry that some might be going too fast.

Global Growth Hits a Soft Patch

Despite a mild slowdown, the global economic recovery continues but the road to health will be a long one. Downside risks, both old and new, are increasing. Our world forecast is 4.3% growth for 2011, and 4.5% for 2012, so down by 0.1% for 2011, and unchanged for 2012, relative to April. This figure hides very different performances for advanced economies on the one hand, and for emerging and developing economies on the other.

Continuing the Momentum—Asia’s Updated Economic Outlook

Asia’s leadership of the global recovery is continuing unabated. The IMF now expects GDP in Asia to grow by about 7¾ percent in 2010 (up about ½ a percentage point from what was envisaged in April), before easing to about 6¾ percent in 2011. And, even though the downside risks to growth have intensified, the region is well equipped to handle them.

Helping Low-income Countries Confront the Worst Economic Crisis in 60 Years

By Hugh Bredenkamp

One of the great tragedies of the present crisis is that it nipped in the bud the longest and most broadly based economic expansion that low-income countries have seen in modern history. These countries were finally reaping the rewards of difficult reforms that go back to the 1980s and 1990s, helped by debt relief and other support. The results were plain to see. During 2000-07, low-income country growth was twice as high as in the previous decade, and inflation fell to single digits. As a result, these countries were finally starting to make inroads in raising living standards and reducing endemic poverty. There was great cause for optimism.

And then came the crisis. Or crises, I should say. For in fact, the low-income countries were besieged by two crises in rapid succession, as the global financial tsunami came hard on the heels of the food and fuel price shock of 2007-08. All of the hard-won gains were suddenly in jeopardy. And the stakes in this part of the world are particularly high, given the potential for human suffering on a wide scale. The effects of lower export volumes, remittances, investment flows, and prices for key export commodities could push hundreds of millions of desperately poor people back (or further) into poverty.

Victims of the crisis

We should remember also that the low-income countries were innocent victims of the crisis. They didn’t make the mistakes of some of the advanced countries, the mistakes that triggered this crisis. Instead, they did many of the right things on the policy front—fiscal positions were strengthened, debt burdens reduced, and comfortable reserve cushions built up in many countries. This makes it all the more important now for the world community to do whatever it can to help.

Continue reading “Helping Low-income Countries Confront the Worst Economic Crisis in 60 Years” »

By | August 31st, 2009|Economic Crisis, Financial Crisis, LICs|0 Comments

Fixing the Financial System

By John Lipsky in Jackson Hole

Despite tentative signs that the global recession is ending, it’s clear that a full recovery will remain inhibited until financial markets are restored to health. While financial market conditions have improved—reflecting among other things massive public sector support—key credit channels remain strained, creating a drag on growth.

One of the keys to strengthening financial markets will be to put securitization markets on a sounder footing, an issue I discuss below.

Rebuilding active and innovative financial systems will be critical for sustaining a new global expansion. After being propped up by government intervention, a recovering economy increasingly will need to rely on private capital.  As confidence and trust are restored, government guarantees will be rolled back gradually, and the crisis-driven expansion in central bank balance sheets will be unwound.

The latest financial market developments have provided positive signals. Most markets have strengthened in recent months, and some asset prices are higher today than prior to last September’s severe turmoil. Equity prices have risen notably, while investment grade corporate and sovereign emerging market debt spreads have narrowed, mainly in response to reduced risk perceptions, but in the case of corporate debt also reflecting better-than-expected economic data.

Potential Output: Worrying About What Cannot Be Observed

By Ajai Chopra

Potential output seems to be on everybody’s mind these days, at least if you talk to economists. What would be merely a curiosity during better times—after all, potential output is a largely abstract concept measuring the level of output an economy can produce without undue strain on resources—has become a particular worry in the context of the global economic crisis.

So what is all the fuss about? In a nutshell, policymakers across Europe are concerned that the deep and long recession will affect supply capacity and weigh down the prospects for recovery.

Continue reading “Potential Output: Worrying About What Cannot Be Observed” »

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