Chart of the Week: Inequality and the Decline in Labor Share of Income

By IMFBlog

As discussed in the IMF’s G20 Note, and a blog last week by IMF Managing Director Christine Lagarde, a forthcoming chapter of the World Economic Outlook seeks to understand the decline in the labor share of income (that is, the share of national income paid in wages, including benefits, to workers) in many countries around the world. These downward trends can have potentially large and complex social implications, including a rise in income inequality.  (more…)

A Shifting Global Economic Landscape: Update to the World Economic Outlook

maury-obstfeld-blogsize-final2By Maurice Obstfeld

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

Today we released our update to the World Economic Outlook.

An accumulation of recent data suggests that the global economic landscape started to shift in the second half of 2016. Developments since last summer indicate somewhat greater growth momentum coming into the new year in a number of important economies. Our earlier projection, that world growth will pick up from last year’s lackluster pace in 2017 and 2018, therefore looks increasingly likely to be realized. At the same time, we see a wider dispersion of risks to this short-term forecast, with those risks still tilted to the downside. Uncertainty has risen.  (more…)

Commodity Commotion

By iMFdirect

Terms of trade is the price of a country’s exports relative to its imports. The commodity terms of trade refers to a country’s commodity exports relative to its commodity imports.

When the price of commodities, like oil, plummeted in 2015, economies that rely on exporting commodities had their terms of trade drop by an average of about 10 percent of GDP that year. Economies that rely more on importing commodities saw about a 2 percent of GDP benefit from the 2015 drop in prices.  (more…)

By | December 21st, 2016|commodities, Economic research, IMF, International Monetary Fund, U.S.|0 Comments

Infrastructure Done Right

By iMFdirect

In the face of crumbling bridges and super-low interest rates, many countries are talking and planning to increase spending on infrastructure. And it’s not just about more spending; it’s about smart spending. This is something that the IMF has urged countries to consider for several years, starting with our Fall 2014 World Economic Outlook(more…)

By | December 13th, 2016|growth, International Monetary Fund, Investment, productivity, U.S.|0 Comments

The World Economy: Moving Sideways

maury-obstfeld-weo_220x150By Maurice Obstfeld

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

A return to the strong, sustainable, balanced, and inclusive growth that Group of Twenty leaders called for at Hangzhou in September still eludes us. Global growth remains weak, even though it shows no noticeable deceleration over the last quarter. The new World Economic Outlook sees a slowdown for the group of advanced economies in 2016 and an offsetting pickup for emerging and developing economies. Taken as a whole, the world economy has moved sideways. Without determined policy action to support economic activity over the short and longer terms, sub-par growth at recent levels risks perpetuating itself—through the negative economic and political forces it is unleashing.

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Tariffs Do More Harm Than Good at Home

maurice-obstfeld2By Maurice Obstfeld

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

A longstanding challenge for the global economy is the possibility that some countries compete for export markets through artificially low prices. Political leaders and pundits sometimes propose import tariffs to offset the supposed price advantages and exert pressure for policy changes abroad. What proponents often fail to realize is that such tariff policies, while certainly hurting their targets, can also be very costly at home. And surprisingly, the self-inflicted harm can be substantial even when trade partners do not retaliate with tariffs of their own. (more…)

A Spanner in the Works: An Update to the World Economic Outlook

21970901656_57e69fe1e3_zBy Maurice Obstfeld

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

The United Kingdom’s June 23 vote to leave the European Union adds downward pressure to the world economy at a time when growth has been slow amid an array of remaining downside risks. The first half of 2016 revealed some promising signs—for example, stronger than expected growth in the euro area and Japan, as well as a partial recovery in commodity prices that helped several emerging and developing economies. As of June 22, we were therefore prepared to upgrade our 2016-17 global growth projections slightly. But Brexit has thrown a spanner in the works.

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Unemployment: Troubles Ahead for Emerging Markets

By Prakash Loungani and Zidong An

Version in Español (Spanish)

Forecasts of real GDP growth attract a lot of media attention. But what matters more to the person on the street is how growth translates into jobs. Unfortunately, the mediocre growth outlook of recent years may lead to a disturbing outlook for jobs, particularly among fuel-exporting countries and in the Latin America and Caribbean region.

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Oil Prices and the Global Economy: It’s Complicated

By Maurice Obstfeld, Gian Maria Milesi-Ferretti, and Rabah Arezki

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

Oil prices have been persistently low for well over a year and a half now, but as the April 2016 World Economic Outlook will document, the widely anticipated “shot in the arm” for the global economy has yet to materialize. We argue that, paradoxically, global benefits from low prices will likely appear only after prices have recovered somewhat, and advanced economies have made more progress surmounting the current low interest rate environment.

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By | March 24th, 2016|Employment, Globalization, IMF, International Monetary Fund, oil, U.S.|0 Comments

Subdued Growth, Diminished Prospects, Action Needed

By Maurice Obstfeld

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

At the start of 2016, turbulence in financial markets has returned amid renewed concern about risks to global economic growth. The fundamental forces that underlay our October World Economic Outlook projections have not dissipated, and in some respects have intensified, leading us to trim our expectations for future medium-term growth of the world economy.

In the World Economic Outlook Update released today, we still, however, expect growth to pick up this year in most countries.

Despite the modesty of the reduction we see in general growth prospects and the promise of improvement in coming years, downside risks to our central scenario have intensified. In our view, a focus on these risks is the main factor driving recent developments in financial markets.

We may be in for a bumpy ride this year, especially in the emerging and developing world.

(more…)

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