Tokyo links — IMF-World Bank Annual Meetings

Posted on October 7, 2012 by iMFdirect

The 2012 annual meetings of the IMF and the World Bank are being held this year in Tokyo at a crucial time for the world economy. Track everything through the live events schedule  (all Tokyo times).

Key reports out this week are

banner in Tokyo

Stay up-to-date through timely reports from IMF Survey online, through iMFdirect blog, World Bank Voices, and through regular video briefings and YouTube.  Also track news and commentary through Google +.

Extensive Japanese  (日本語) language content and updates are also available.

The Meetings bring together more than 10,000 central bankers, ministers of finance and development, private sector executives, academics, and journalists to discuss global economic issues and the interconnected world.

Filed under: Advanced Economies, Africa, Annual Meetings, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Europe, Finance, Financial Crisis, Fiscal policy, G-20, Global Governance, Globalization, IMF, International Monetary Fund, Latin America, LICs, Low-income countries, Middle East, Multilateral Cooperation, Politics, Public debt | Tagged: , , , , , , , , , , , , , , , , , , , | 4 Comments »

United States: How Inequality Affects Saving Behavior

Posted on September 13, 2012 by iMFdirect

By Oya Celasun

(Version in Español)

The incomes of U.S. households have become more unevenly distributed over the past three decades. For example, the Congressional Budget Office estimates that after-tax income almost tripled for the top 1 percent of households between 1980 and 2007, but grew only 22 percent for the bottom 20 percent.

Recent research has focused on the link between income inequality and growth, but less attention has been paid to the link between inequality and savings. So together with a few colleagues we have looked at how income distribution is linked to saving behavior.

Saving rates matter because they are an important factor for the U.S. economic outlook. The decline in the saving rate in the years leading up to the crisis (from 10 percent of after-tax income in 1980 to 1.5 percent in 2005) is the mirror image of the unsustainable boom in consumer spending during the bubble years.

Following the crisis, sharp losses in the values of houses and financial assets, as well as difficulties in obtaining new credit, forced American families to save more and rebuild their wealth. The ensuing rise in the saving rate, which stood at 4 percent in the second quarter of 2012, has been an important reason why the recovery from the 2008–09 recession has been sluggish.

Therefore, our study looked at which types of households drove the aggregate saving rate down before the crisis and those that drove it up afterwards, so as to improve our ability to assess the potential for future U.S. growth.

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Filed under: Advanced Economies, Economic Crisis, Economic outlook, Economic research, Finance, Financial Crisis, Fiscal policy, growth, IMF, Inequality, International Monetary Fund, Politics, Public debt, recession | Tagged: , , , , , , , , , , , | 5 Comments »

Promoting Multilateral Solutions for a Globalized World

Posted on August 30, 2012 by iMFdirect

Jeremy CliftBy Jeremy Clift

(Version in Español,  عربي)

We live in an increasingly globalized and interconnected world, helping to spread ideas, information, and technology ever more quickly. The globalized economy has created a complex and interlocking network of capital and trade flows that have brought major economic gains, lifting hundreds of millions of people out of poverty around the world.

But, as we have seen from the prolonged global financial crisis, our interconnectedness carries grave risks as well as benefits. With instant communication comes the risk of rapid contagion. There is, thus, a strong public interest in ensuring that global economic integration is supported by a coherent set of coordinated national macroeconomic policies and a harmonized international regulatory regime that addresses the fragilities in our global financial system.

The new issue of Finance & Development magazine looks at different aspects of interconnectedness. Kishore Mahbubani, dean of the National University of Singapore’s Lee Kuan Yew School of Public Policy and author of the forthcoming book The Great Convergence: Asia, the West, and the Logic of One World, argues that what he terms the global village increasingly requires global solutions to big emerging problems such as climate change.

(more…)

Filed under: Advanced Economies, Africa, Asia, Civil Society, Debt Relief, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Employment, Europe, Finance, Financial Crisis, Fiscal policy, Global Governance, Globalization, growth, Inequality, International Monetary Fund, Investment, Latin America, Low-income countries, Middle East, Multilateral Cooperation, Politics, Public debt | Tagged: , , , , , , , , , , , , , , , , , , , , , , | 5 Comments »

Japan Stands Up

Posted on August 1, 2012 by iMFdirect

By Jerry Schiff

(Version in  日本語)

As a Japanese proverb has it: “Knocked down seven times, get up eight.”

In a display of its resilience, Japan is getting up once again after the devastating earthquake and tsunami of a year ago.  But the world’s third largest economy still faces multiple challenges, and in our latest assessment of the country’s economy, the Japanese mission team at the International Monetary Fund has proposed a range of mutually reinforcing policies to strengthen confidence, raise growth and help restore Japan’s economic vitality.

A year and four months ago, Japan was reeling from the Great East Japan earthquake and accompanying devastation.  As well as the tragic loss of life, the economy was badly shaken.  Supply chain disruptions brought production in parts of Japan to a virtual halt. Yet, since then, the country has shown its resilience, with reconstruction contributing to strong first quarter growth of 4¾ percent.

But despite this hopeful sign, all is not well.

(more…)

Filed under: Advanced Economies, Asia, Civil Society, Economic Crisis, Economic outlook, Economic research, Financial Crisis, Fiscal policy, growth, IMF, Politics | Tagged: , , , , , , , , , , , , | 2 Comments »

World Faces Weak Economic Recovery

Posted on July 16, 2012 by iMFdirect

By Olivier Blanchard

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

The global recovery continues, but the recovery is weak; indeed a bit weaker than we forecast in April.

In the Euro zone, growth is close to zero, reflecting positive but low growth in the core countries, and negative growth in most periphery countries.  In the United States, growth is positive, but too low to make a serious dent to unemployment.

Growth has also slowed in major emerging economies, from China to India and Brazil.

Downside risks, coming primarily from Europe, have increased.

Let me develop these themes in turn.

(more…)

Filed under: Advanced Economies, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Employment, Europe, Fiscal policy, growth, IMF, International Monetary Fund | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 10 Comments »

Global Crisis — Top Links from the IMF for Economics and Finance

Posted on June 27, 2012 by iMFdirect

Our top links for June, 2012 from iMFdirect blog and others:

Filed under: Advanced Economies, Africa, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Employment, Europe, Finance, Financial Crisis, Fiscal policy, Globalization, growth, Inequality, International Monetary Fund, Investment, Latin America, LICs, Middle East, Multilateral Cooperation, Politics, Public debt | Tagged: , , , , , , , , , , , , , , , , , , , , , , , | 2 Comments »

Latin America: Riding the Global Financial Waves

Posted on June 17, 2012 by iMFdirect

By Gustavo Adler and Camilo E. Tovar

(Version in Español)

Latin America has a long history of accidents that have occurred while navigating turbulent financial international waters. With risks looming over the world economy, should the region worry about new global financial waves?

Global financial markets have seen frequent bouts of severe stress since 2008, although this isn’t really anything new for the region. Global financial shocks have occurred on average every 2½ years since 1990, with significant effects on Latin America.

But how costly are these shocks in terms of domestic output, and is Latin America better placed to cope with them this time?

In Chapter 3 of the IMF’s latest Regional Economic Outlook: Western Hemisphere, we analyze whether changes in underlying fundamentals have made the region more or less vulnerable over time. The analysis, which complements our work on the effects of terms-of-trade shocks, looks at what country features and policies make a difference. We focus here solely on the impact of the financial shocks by isolating the effect from commodity prices and global demand shocks.

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Filed under: Economic Crisis, Economic outlook, Economic research, Emerging Markets, Employment, Español, Financial Crisis, Globalization, growth, Investment, Latin America, Politics | Tagged: , , , , , , , , , , , , | 2 Comments »

Lessons from Latvia

Posted on June 11, 2012 by iMFdirect

By Olivier Blanchard

In 2008, Latvia was widely seen as an economic “basket case,” a textbook example of a boom turned to bust.

From 2005 to 2007, average annual growth had exceeded 10%, the current account deficit had increased to more than 20% of GDP.  By early 2008 however, the boom had come to an end, and, by the end of 2008, output was down by 10% from its peak, the fiscal deficit was shooting up, capital was leaving the country, and reserves were rapidly decreasing.

The treatment seemed straightforward: a sharp nominal depreciation, together with a steady fiscal consolidation.  The Latvian government however, wanted to keep its currency peg, partly because of a commitment to eventually enter the euro, partly because of the fear of immediate balance sheet effects of devaluation on domestic loans, 90% of them denominated in euros.  And it believed that credibility required strong frontloading of the fiscal adjustment.

Painful adjustment

Many, including me, believed that keeping the peg was likely to be a recipe for disaster, for a long and painful adjustment at best, or more likely, the eventual abandonment of the peg when failure became obvious.

Nevertheless, given the strong commitment of both Latvia and its European Union partners, the IMF went ahead with a program which kept the peg and included a strongly front-loaded fiscal adjustment.

Four years later, Latvia has one of the highest growth rates in Europe, the peg has held, and the fiscal and current accounts are close to balance.

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Filed under: Economic Crisis, Economic outlook, Economic research, Emerging Markets, Employment, Europe, Financial Crisis, Fiscal policy, growth, Inequality, Politics, Public debt, recession | Tagged: , , , , , , , , , , , | 20 Comments »

Imagining If Key Foreign Banks Start Reducing Their Exposure in Asia

Posted on June 10, 2012 by iMFdirect

By Anoop Singh

European banks play an important role in supplying credit to several Asian economies. What happens if they start reducing their exposure to the region?

The largest borrowers from European banks are Australia, Hong Kong SAR, Korea, Malaysia, New Zealand, Singapore, and Taiwan Province of China, while China, India, and the economies of South East Asia generally have smaller liabilities.

Among European banks, those from the United Kingdom have a particularly significant presence in Asia. For most regional economies, the nonbank private sector—businesses and households—is the main recipient of credit from foreign banks as a whole.

Prominent role

European banks play a prominent role in the areas of trade credit and specialized project financing. In several Asian economies, however, lending by local subsidiaries and branches is funded primarily by local deposits, reducing potential deleveraging pressures.

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Filed under: Asia, Economic Crisis, Economic outlook, Emerging Markets, Employment, Europe, Finance, Globalization, International Monetary Fund, Investment, Politics, recession | Tagged: , , , , , , , , , , , , , , | 1 Comment »

Latvia Beat the Odds—But the Battle Is Far From Over

Posted on June 1, 2012 by iMFdirect

By Mark Griffiths

Latvia, a nation of about 2.2 million people bordering the Baltic Sea, went through the most extreme boom-bust cycle of the emerging market countries of Europe, and was among the first to ask for financial assistance from the international community.

Back in the dark days of December 2008, many doubted that Latvia—which joined the European Union in 2004 together with its Baltic neighbors Estonia and Lithuania—would be able to stick to the tough economic program it had just agreed with the IMF and the European Union. But it did. Against the odds, it successfully completed its IMF-supported program in December 2011.

Over the past three years, I have worked closely with the Latvian authorities in my capacity as IMF mission chief. Worked with them—but learnt from them too.

A successful comeback

Today, Latvia is one of the fastest growing economies in the European Union. Real GDP grew by 5½ percent in 2011, and is now projected to expand by 3½ percent in 2012, a number that possibly will come out even higher.

(more…)

Filed under: Advanced Economies, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Europe, Financial Crisis, growth, IMF, Inequality, International Monetary Fund, Politics, Public debt, recession | Tagged: , , , , , , , , , , , , | 1 Comment »

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