Posted on September 2, 2014 by iMFdirect
By Jeff Hayden
You can call this edition of F&D magazine our Bob Dylan issue. It may seem odd for an economics magazine to draw inspiration from the legendary singer/songwriter, but one of his most famous lines, “The times, they are a-changin,’” reverberated through our corridors as we put together this special issue on the global economy’s past and future.
We weren’t humming the tune to pass the time. The lyrics seemed especially relevant to us this year, as we mark the 70th anniversary of the IMF and World Bank and the 50th anniversary of F&D. The world has seen a staggering amount of change in the past seven decades.
So, with these two anniversaries in mind and with Dylan’s ode to changing times in the air, we focused our attention on the transformation of the global economy—looking back and looking ahead. We wanted to address the question, what will the global economy look like in another 70 years?
Filed under: Economic outlook, Economic research, Financial Crisis, Globalization, growth, IMF, Inequality, International Monetary Fund, Reform | Tagged: Christine Lagarde, energy, Finance & Development magazine, Finance & Development. F&D, George Akerlof, global economy, inequality, Joseph Stiglitz, Ken Arrow, Michael Spence, Nobel Prize, Olivier Blanchard, Paul Krugman, Robert Solow, SGP. Martin Wolf | Leave a comment »
Posted on August 28, 2014 by iMFdirect
By Deniz Igan
(Version in Español)
Something unusual happened this year. For the first time in almost ten years, a book by an economist made it to Amazon’s Top 10 list. Thomas Piketty’s Capital in the Twenty-First Century captured the attention of people from all walks of life because it echoed what an increasing number of Americans have been feeling: the rich keep getting richer and poverty in America is a mainstream problem.
The numbers illustrate the troubling reality. According to the U.S. Census Bureau, 1 in 6 Americans—almost 50 million people—are living in poverty. Recent research documents that nearly 40 percent of American adults will spend at least one year in poverty by the time they reach 60. During 1968–2000, the risk was less than 20 percent. More devastatingly, 1 in 5 children currently live in poverty and, during their childhood, roughly 1 in 3 Americans will spend at least one year living below the poverty line.
Filed under: Financial Crisis, Globalization, Advanced Economies, International Monetary Fund, IMF, recession, Economic research, Employment, Economic outlook, Investment, unemployment, Reform | Tagged: economic recovery, education, health care, jobs, labor market, poverty, poverty reduction, recession, rich and poor, tax, U.S., United States, wages | Leave a comment »
Posted on August 14, 2014 by iMFdirect
By Stephan Danninger
(Versions in 日本語)
Japan’s GDP declined by almost 7 percent in the second quarter, more than many had forecast including us here at the IMF. Many cite the increase in the sales tax this April for this decline. But that is not the full story.
Yes, it is true that consumer responses to major tax increases are difficult to predict, and large spending swings are not unusual. We see this pattern in many countries (see chart) including Germany’s 2007 VAT increase, which had a short-lived impact.
Filed under: Advanced Economies, Asia, Economic outlook, Economic research, Employment, Finance, Fiscal policy, growth, IMF, International Monetary Fund, Investment, Reform | Tagged: Abenomics, Bank of Japan, consumption tax, Germany, inflation, Japan, labor market, sales tax, structural reform, VAT | Leave a comment »
Posted on August 7, 2014 by iMFdirect
By Ravi Balakrishnan
(Version in Español)
It’s not supposed to be this way. As the U.S. economy recovers, hirings increase and people are encouraged to look for jobs again. Instead, the ratio of the adult population with jobs, or looking for one—what’s called the labor force participation rate—has been falling, standing at 62.9 percent in July 2014 (Figure 1).
Filed under: Advanced Economies, Economic Crisis, Economic outlook, Economic research, Employment, Financial Crisis, growth, IMF, International Monetary Fund, unemployment | Tagged: Great Recession, job-creating growth, labor force, labor market, Macroeconomic policies, United States, youth | Leave a comment »
Posted on August 5, 2014 by iMFdirect
By Ruud de Mooij and Ikuo Saito
(Versions in 日本語)
It is no surprise that, as part of its revised growth strategy presented in June, the Japanese government has announced it will reduce the corporate income tax rate. At more than 35 percent for most businesses, the Japanese rate is one of the highest among the industrialized countries of the Organization for Economic Cooperation and Development (see Chart 1). Moreover, at a time when Japan needs to boost economic growth, the corporate income tax rate is generally seen as the country’s most growth-distortive tax.
Filed under: Advanced Economies, Asia, Economic research, Employment, Financial regulation, Globalization, growth, IMF, International Monetary Fund, Investment | Tagged: consumption tax, corporate income tax, Italy, Japan, public debt, small and medium-sized enterprises, tax cuts, tax deduction, tax incentives | Leave a comment »
Posted on August 1, 2014 by iMFdirect
By Alberto Behar
(Version in Русский)
The countries of the Caucasus and Central Asia (CCA) are closely linked with Russia through trade, financial, and labor market channels. These ties have served the region well in recent years, helping it make significant economic gains when times were good. But how is the region affected when Russia’s economy slows down?
Underlying structural weaknesses have reduced Russia’s growth prospects for this year and over the medium term. Tensions emanating from developments in eastern Ukraine—including an escalation of fighting, the downing of Malaysian Airlines Flight 17, and new sanctions—have led to renewed market turbulence in Russian markets.
Experience has shown that lower growth in a large country can inflict significant collateral damage on neighboring countries with strong linkages of the type that the CCA has with Russia. (See also separate blog on Russia-Europe links.) We took a closer look at these connections to see how they transmit shocks, with particular attention to the impact on the region’s two main categories of economies—hydrocarbon importers and hydrocarbon exporters (see map).
Filed under: Advanced Economies, Asia, Русский, Economic Crisis, Economic outlook, Economic research, Europe, Globalization, growth, IMF, International Monetary Fund | Tagged: Armenia, Caucasus and Central Asia, gas, Kyrgyz Republic, oil exporters, oil-importing countries, Russia, spillover, Tajikistan, Ukraine | Leave a comment »