Posted on March 31, 2015 by iMFdirect
By Yan Liu, Kenneth Kang, Dermot Monaghan, and Wolfgang Bergthaler
Six years after the global financial crisis, Europe continues to be weighed down by high levels of corporate debt and millions of nonperforming loans. Small and medium-sized enterprises (SMEs) bear a disproportionately heavy burden. Their nonperforming loan ratios are on average more than double those of their larger corporate cousins. This is worrisome. SMEs are the lifeblood of the European economy, comprising 99 percent of all businesses and employing nearly two of every three workers in Europe. Given the importance of smaller businesses to the economy, addressing their problem loans could lay the foundation for a more robust and sustainable economic recovery.
Filed under: Advanced Economies, Economic Crisis, Economic research, Europe, Financial Crisis, Fiscal policy, Government, growth, IMF, International Monetary Fund, Investment, Reform | Tagged: Cyprus, euro zone, Europe, European Central Bank, Greece, Ireland, non-performing loans, nonperforming loans, small and medium-sized enterprises | Leave a comment »
Posted on March 27, 2015 by iMFdirect
By Vitor Gaspar
One of the big questions to emerge from the global financial crisis, especially in the euro area, is how to raise a country’s potential growth while restoring healthy public finances. For example, the euro area— despite some favorable news recently — faces marked-down growth prospects alongside high levels of public debt. The combination of high debt and tepid potential growth underscores the importance of improving prospects for sustained growth and safe and resilient public finances. A fundamental question then arises: what is the relation between fiscal consolidation and structural reform?
Filed under: Advanced Economies, Economic Crisis, Economic outlook, Economic research, Employment, Europe, Financial Crisis, Fiscal policy, growth, IMF, International Monetary Fund, Investment, Public debt, Reform | Tagged: euro area, Fiscal Monitor, fiscal policy, Germany, labor market, risk management, structural reform, Sweden, youth | Leave a comment »
Posted on March 26, 2015 by iMFdirect
By Olivier Blanchard, Atish R. Ghosh, Mahvash S. Qureshi
As with previous crises, the global financial crisis has prompted greater calls for international policy cooperation, but it still remains very much like Nessie, the lovable Loch Ness monster: oft-discussed, seldom seen. To reflect on the obstacles to international policy cooperation, and how to make progress, the IMF recently hosted a panel discussion, Toward a More Cooperative International Monetary System: Perspectives from the Past, Prospects for the Future, with Maurice Obstfeld (CEA; University of Berkley), José Antonio Ocampo (Columbia University), Alexandre Swoboda (The Graduate Institute, Geneva), and Paul Volcker (Former Chairman, Federal Reserve).
Filed under: Economic Crisis, Economic outlook, Economic research, Global Governance, Globalization, growth, IMF, International Monetary Fund, Multilateral Cooperation, Politics, Reform | Tagged: capital flows, exchange rate, G-20, health care, international monetary system, international policy coordination, liquidity, Olivier Blanchard, trade | Leave a comment »
Posted on March 11, 2015 by iMFdirect
By Jochen Andritzky
(Versions in Español)
In housing crises, high mortgage debt can feed a vicious circle of falling housing prices and economic slowdown. As a result, more households default on their mortgages and the crisis deepens. A new IMF Working Paper studies the differences in the housing crises and policy responses in Iceland, Ireland, Spain, and the United States, and argues that crisis policies geared to provide temporary debt service relief for struggling households, followed by durable loan modifications, can help break this vicious circle.
Filed under: Advanced Economies, Economic Crisis, Economic outlook, Economic research, Europe, Financial Crisis, growth, IMF, International Monetary Fund, Investment, Reform | Tagged: Foreclosures, house prices, housing market, Iceland, Ireland, loans, mortgages, recession, Spain, United States | Leave a comment »
Posted on February 19, 2015 by iMFdirect
By Bergljot Bjørnson Barkbu, S. Pelin Berkmen, and Hanni Schölermann
Investment in the euro area, and particularly private investment, has not recovered since the onset of the global financial crisis.
In fact, the decline in investment has been much more drastic than in other financial crises; and is more in line with the most severe of these crises (see Chart 1). The October 2014 World Economic Outlook showed that many governments cut investment because their finances became strained during the crisis. In addition, housing investment collapsed in some countries, reflecting a natural scaling back after an unsustainable boom. But what is holding back private non-residential investment?
Filed under: Advanced Economies, Economic Crisis, Economic research, Europe, Financial Crisis, growth, IMF, International Monetary Fund, Investment, Reform | Tagged: banking union, euro area, France, Germany, Greece, investment, Ireland, Italy, monetary policy, Portugal, Spain, structural reform | Leave a comment »
Posted on February 12, 2015 by iMFdirect
By Nigel Chalk and Jarkko Turunen
The remarkable collapse in the price of oil—a key global price that has virtually halved in the space of just a few months—has received a lot of attention lately.
Meanwhile, another significant shift has taken place in recent months that is just as surprising and has wide-reaching global implications—the dramatic drop in long-term U.S. Treasury bond yields. The last time we saw 10-year Treasury bond yields this low was in early May 2013. As many will remember, this didn’t last long and when it corrected, it set off a burst of volatility across emerging markets.
Filed under: Advanced Economies, Economic Crisis, Economic research, Emerging Markets, Finance, Fiscal policy, growth, IMF, International Monetary Fund, Investment | Tagged: bond yields, emerging market, inflation, interest rates, market volatility, oil prices, U.S., U.S. Federal Reserve, United States | Leave a comment »
Posted on February 11, 2015 by iMFdirect
By Christopher Jarvis
(Version in عربي)
Egypt currently faces what may seem to be conflicting objectives. On the one hand, there’s an urgent need to restore economic stability—by achieving lower budget deficits, public debt and inflation, and adequate foreign exchange reserves. At the same time, there’s a long-standing need to achieve better standards of living—with more jobs, less poverty, and better health and education systems—one of the key reasons why people took to the streets in 2011.
Some might think that those two goals don’t go together—that the actions needed to reduce the budget and external deficits will necessarily take away from jobs and growth. But that’s not true. Some of the same policies that will improve Egypt’s financial situation can also help improve living standards.
Filed under: Economic Crisis, Economic outlook, Economic research, Employment, Financial Crisis, Government, growth, IMF, International Monetary Fund, Investment, Middle East, Public debt, Reform | Tagged: Arab Spring, Article IV, education, Egypt, fiscal deficit, health, inflation, infrastructure, jobs, Middle Eas, poverty, public debt, structural reform, tourism, unemployment | Leave a comment »