Posted on July 20, 2010 by iMFdirect
By José Viñals
Monetary stability seems almost a given today, even taken for granted. It wasn’t always like that. Not so long ago, high and volatile inflation routinely raised its ugly head and threatened living standards. Some of us even remember those days! It wasn’t pleasant. But since then, an effective antidote has pretty much wiped out rampant price instability. Over the past three decades, better monetary frameworks have caused the level and volatility of inflation to fall sharply. These frameworks enshrined price stability as the main monetary policy objective, and provided independence and constrained discretion in the pursuit of this objective, often set out through formal inflation targets.
As I said, it worked out well. Or did it? In reality, there was a gaping hole in the system. While monetary policy frameworks fortified the castle against inflation at the front, they didn’t pay much attention to back door vulnerabilities. I’m talking about financial stability.
Filed under: Advanced Economies, Economic Crisis, Emerging Markets, Financial Crisis, Financial regulation, Fiscal Stimulus, IMF, International Monetary Fund | Tagged: asset price bubbles, central banking, financial reform, Financial regulation, financial stability, global financial crisis, global financial linkages, inflation, inflation targets, international trade, monetary policy, price stability | 3 Comments »
Posted on July 15, 2010 by iMFdirect
By Dominique Strauss-Kahn
(Version in 中文, 日本語 and 한국어)
In Daejeon, Korea earlier this week, a remarkable event took place that enabled the world to hear the voice of Asia and to learn how the region has been able to show such great resilience in the face of the worst global financial crisis since the 1930s. On July 12 and 13, more than 1,000 officials, economists, bankers, analysts, and media assembled for a conference titled Asia 21: Leading the Way Forward, hosted by the Korean government and the IMF. I personally learned a great deal about Asia’s growing stake in the global economy—and the global economy’s growing stake in Asia. As the world strives to leave the crisis behind, the economic center of gravity is shifting increasingly eastwards, and Asia’s role is more vital than ever before.
Our objectives with this conference, jointly organized with the superb help of our Korean partners, were three-fold: Continue reading
Filed under: Advanced Economies, Asia, Economic Crisis, Emerging Markets, G-20, Global Governance, Globalization, IMF, International Monetary Fund, Multilateral Cooperation, 中文 | Tagged: Asia and the IMF, Asia21, Asian crisis, capital flows, domestic investment, early warning exercise, economic cooperation, economic powerhouse, G-20, G-20 mutual assessment process, global financial safety net, governance reform, IMF quotas, multilateral surveillance, regional financial safety nets, regional financing mechanisms, spillovers, surveillance | 6 Comments »
Posted on July 11, 2010 by iMFdirect
By Naoyuki Shinohara
(Version in 中文, 日本語 and 한국어)
Asia’s voice is getting louder and the IMF—and, indeed, the world—is listening.
I am writing from Daejeon, Korea where the Fund and the government of Korea are hosting together a high-level international conference over the next two days.
The conference, entitled Asia 21: Leading the Way Forward, is an opportune time to reflect on exactly that: Asian leadership. Both the topics to be discussed and participants expected for the event speak volumes of the range and depth of expertise and experience in the region.
With broader recognition of the region’s economic, analytic and policy successes, Asia is now a leading voice in the global dialogue on economic and financial policies.
Filed under: Advanced Economies, Asia, Economic Crisis, Emerging Markets, G-20, Global Governance, IMF, International Monetary Fund, Low-income countries, Multilateral Cooperation | Tagged: Asia and the IMF, Asia21, Asian integration, G-20, G-20 mutual assessment process, global financial crisis, global financial safety net, IMF governance, international monetary cooperation, New Arrangements to Borrow, policy coordination, regional economic analysis, regional financial safety nets, regional financing mechanisms, regional integration, sustainable recovery | Leave a comment »
Posted on July 9, 2010 by iMFdirect
By Anoop Singh
Asia’s leadership of the global economic recovery is continuing unabated. And, even though heightened risks mean there may be tough times ahead again, the region is well equipped to handle them.
Asia’s remarkably fast recovery from the global financial crisis continued in the first half of 2010, despite the recent tensions in global financial markets. In fact, GDP growth in the first quarter was generally stronger than we anticipated in our Regional Economic Outlook in April. And high-frequency indicators suggest that Asian economic activity remained brisk in the second quarter. Even more notable, this is true both for economies that escaped a recession in 2009, thanks to their relatively larger domestic demand bases (China, Indonesia, and India), and for the more export-oriented economies such as Japan, the Newly Industrialized Economies (NIEs), and the rest of the ASEAN.
Two growth engines
What explains the strong economic momentum across the region? It is simple. The two “engines of growth” that spurred Asia’s recovery in 2009— exports and private domestic demand—have remained robust in 2010.
Filed under: Asia, Economic Crisis, Emerging Markets, Financial Crisis, Fiscal Stimulus, growth | Tagged: ASEAN, Asia, Australia, capital flows, China, domestic demand, exports, Fiscal Stimulus, global economy, India, Indonesia, International Monetary Fund, Japan, New Zealand, policy stimulus, private domestic demand, regional economic outlook, World Economic Outlook | Leave a comment »
Posted on July 9, 2010 by iMFdirect
By Anoop Singh
In just a few days’ time, the Korean government and the IMF will jointly host a high-level international conference in Daejeon, Korea. At the Fund, we are trying continually to enhance our strategic dialogue with Asia, and the conference is an important part of this effort.
Asia’s leadership of the global recovery is undeniable, as I have said in earlier blogs. And the extensive reforms and improved macroeconomic policy frameworks that underpinned the region’s remarkable resilience to the global crisis will see Asia’s successes continue. In just two short decades, we expect it to become the largest economic region in the world.
The Korea conference will be an opportunity to showcase Asia’s economic successes, and also highlight the importance of regional integration and cooperation, which has been growing rapidly in Asia.
Filed under: Advanced Economies, Asia, Economic Crisis, Emerging Markets, G-20, Global Governance, Globalization, growth, IMF, International Monetary Fund, Low-income countries, Multilateral Cooperation | Tagged: Asia, Asia and the IMF, Asia-Pacific, Asian integration, cross-border linkages, early warning exercise, financial sector reform, G-20, global economic crisis, global financial safety net, governance, governance reform, IMF governance, low-income countries, multilateral surveillance, policy coordination, rebalance global economy, regional financial safety nets, regional integration, spillovers, strong policy frameworks, surveillance, vulnerability analysis | Leave a comment »
Posted on July 8, 2010 by iMFdirect
By Olivier J. Blanchard
The macroeconomic forecasts in the IMF’s latest World Economic Outlook update reflect two opposing forces. Looking back, say over the first half of the year, numbers about economic activity have come in strong, indeed somewhat stronger than we had forecast. These would give reasons to be more optimistic than we were earlier.
Looking forward, however, strong clouds have appeared on the horizon. They present real dangers and serious policy challenges, and give reasons to be less optimistic than we were earlier.
Assessing the balance of these two forces is a difficult exercise. Our forecast for world growth in 2010 is about 4½ %, a bit higher than our April forecast of around 4¼ %. This revision largely reflects the stronger activity during the first half of the year. Our forecast for 2011 is broadly unchanged, at about 4¼ %.
Filed under: Advanced Economies, Africa, Asia, Economic Crisis, Economic research, Emerging Markets, Europe, Financial Crisis, Fiscal Stimulus, Low-income countries, recession | Tagged: capital flows, China, euro, Europe, fiscal consolidation, G-20, Greece, IMF World Economic Outlook, Olivier Blanchard, unemployment, world growth, yuan | 4 Comments »
Posted on July 5, 2010 by iMFdirect
By José Viñals
Financial system reform has reached a critical point around the world. Pressure is building from the financial industry to slow reform and concerns about fiscal conditions risk drawing public and political energies away from the need to act on financial sector problems. Fortunately, the Group of Twenty (G-20) reaffirmed its commitment at a summit in Toronto on June 26-27 to a comprehensive reform agenda—and we must seize the moment.
Filed under: Advanced Economies, Economic Crisis, Financial Crisis, Financial regulation, Globalization, IMF, International Monetary Fund, Multilateral Cooperation | Tagged: financial reform, financial sector regulation, Financial Stability Board, FSB, G-20, nonbanks, Toronto summit, World Bank | 5 Comments »