Posted on December 9, 2014 by iMFdirect
By Ratna Sahay and Preya Sharma
You may hear a sigh of relief from emerging market watchers as we approach the end of the year. Yet, against the backdrop of a prolonged period of low interest rates in advanced economies, huge capital flows, and a slowdown in emerging market growth, 2015 promises to keep us all on our toes. Differences in the timing of exit from unconventional monetary policy in advanced economies will have a global impact. The IMF has been keeping a close eye on developments in emerging markets, providing analysis on issues such as how investors’ differentiate between emerging market countries, the impact of volatile markets, and the factors explaining the slowdown in growth.
In a recent paper, we take a look back at what happened before and during the tapering episode to draw out the key lessons for policymakers. Past experience is clear: decisions by major central banks can have sizable global spillovers. Announcements by the U.S. Federal Reserve, in particular, have been strongly correlated with asset price volatility and capital flows in emerging markets. With expectations of Fed tightening to begin in 2015, we think a better understanding of these events can better inform policymakers’ decisions.
Filed under: Advanced Economies, Economic research, Emerging Markets, Financial Crisis, Government, growth, IMF, International Monetary Fund, Politics | Tagged: capital flows, central banks, emerging market, financial market, liquidity, market volatility, monetary policy, U.S. Fed, unconventional monetary policy | Leave a comment »
Posted on December 8, 2014 by iMFdirect
By Jeff Hayden
“The first wealth is health,” American philosopher Ralph Waldo Emerson wrote in 1860.
Emerson’s quote, cited by Harvard economist and health expert David E. Bloom in Finance and Development’s lead article, reminds us that good health is the foundation on which to build—a life, a community, an economy.
Humanity has made great strides, developing vaccines and medical techniques that allow us to live longer, healthier lives. Other developments—such as increased access to clean water and sanitation—have helped beat back long-standing ills and pave the way for better health.
Filed under: Advanced Economies, Africa, Economic research, Emerging Markets, Financial Crisis, Globalization, IMF, International Monetary Fund, Low-income countries, Transition | Tagged: ebola, Finance & Development magazine, Finance & Development. F&D, health care, life expectancy, Nobel Prize, poverty, public health spending, Rwanda | Leave a comment »
Posted on December 2, 2014 by iMFdirect
By Christine Lagarde
(Versions in Español and Português)
I am looking forward to being in Peru this week to discuss economic and social developments with the government and a wide range of stakeholders—and also to follow up on the preparations for the next IMF–World Bank Annual Meetings, which will be held in Lima in October 2015. Later this week, I will participate in the Santiago Conference in Chile, where I will meet policymakers and influential representatives from Latin America and the Caribbean to discuss economic approaches to strengthen the entire region.
As I travel to the land of the Andes, I am reminded of the natural beauty of the region, the richness of its culture, and its incredible diversity. Despite its current challenges—growth continues to slow, as global economic and financial conditions are shifting and economies run up against capacity limits—I remain decidedly optimistic about the region’s potential to raise living standards while protecting its unique heritage and precious environment.
Filed under: Economic outlook, Emerging Markets, Español, Finance, Fiscal policy, Globalization, Government, growth, IMF, International Monetary Fund, Latin America, Reform | Tagged: Caribbean, Chile, Christine Lagarde, commodiity prices, conference, education, health care, inequality, infrastructure, Latin America, Peru, poverty, youth | Leave a comment »
Posted on November 26, 2014 by iMFdirect
By Olivier Blanchard, Luc Laeven, and Esteban Vesperoni
The last five years have been a reminder of the importance of interconnections and risks in the global economy. They have triggered intense discussions on the optimal way to combine fiscal, monetary, and financial policies to deal with spillovers, and on the need and the scope for coordination of such policies.
The IMF’s 15th Jacques Polak Annual Research Conference, which took place in Washington DC on November 13 and 14, 2014, focused on Cross-Border Spillovers, and took stock of what we know and do not know. The summary below picks and chooses some papers, and does not do justice to the full set of papers presented and discussed at the conference. They can all be downloaded, and videos of each session are available, at www.imf.org/external/np/res/seminars/2014/arc.
Filed under: Advanced Economies, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Europe, Finance, Financial Crisis, Fiscal, Fiscal policy, G-20, Globalization, growth, IMF, International Monetary Fund, Politics | Tagged: banks, capital flows, European Central Bank, exchange rate, Federal Reserve, fiscal policy, G-20, global economy, global trade, IMF Annual Research Conference, Italy, monetary policy, Olivier Blanchard, public spending, Spain, spillovers, unconventional monetary policy, United States | Leave a comment »
Posted on November 19, 2014 by iMFdirect
By Davide Furceri and Prakash Loungani
(Versions in عربي, 中文, Français, 日本語, Русский, and Español)
Unemployment is a global problem. If the unemployed formed their own country, it would be the fifth largest in the world. Of the nearly 200 million people around the world looking for work, half are in emerging markets and about a quarter in advanced economies, reflecting the growing weight of emerging markets in the global labor force (Figure 1).
Filed under: Advanced Economies, Economic Crisis, Economic research, Emerging Markets, Employment, Europe, G-20, growth, IMF, International Monetary Fund, unemployment | Tagged: advanced economies, emerging economies, frontier economies, G20, gowth, infrastructure, job creation, jobs, labor force, Russia, unemployment, United States, World Economic Outlook | Leave a comment »
Posted on November 17, 2014 by iMFdirect
By Min Zhu
(Versions in 中文, Русский)
The world’s central bankers are certainly in the news these days. Not a week goes by without the Fed, the European Central Bank or the Bank of Japan taking big and often unprecedented actions to fight deflation, preserve financial stability, or address mediocre growth. We tend to forget, however, that these are not the only central banks that are struggling to adapt their policies to changing circumstances in our connected world.
Take the Caucasus and Central Asia — Armenia, Azerbaijan, Georgia, Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan. Central banking in these former Soviet republics rarely makes international headlines. But figuring out how best to design and run monetary policy is no less a challenge than in the United States or the euro zone.
Filed under: Advanced Economies, Economic Crisis, Economic research, Emerging Markets, Financial Crisis, Government, growth, IMF, International Monetary Fund, Politics, Reform | Tagged: Armenia, Azerbaijan, Bank of Japan, Caucasus and Central Asia, central banks, European Central Bank, exchange rate, Georgia, Kazakhstan, Kyrgyz Republic, Min Zhu, monetary policy, Russia, Switzerland, technical assistance, Turkmenistan, United States, Uzbekistan | Leave a comment »
Posted on November 12, 2014 by iMFdirect
By Olivier Blanchard, Luc Laeven and Esteban Vesperoni
The global crisis—which challenged paradigms about the functioning of financial markets and had significant consequences in other markets—and the sluggish recovery since 2009, are a reminder of the importance of understanding interconnections and risks in the global economy. The increasing trend in global trade, and even more significant, in cross-border financial activities, suggests that spillovers can take many different forms.
The understanding of transmission channels of spillovers has become essential, not only from an academic perspective, but also policymaking. The challenges faced by policy coordination after the initial response to the crisis in 2009—illustrated by the debate on the impact of unconventional monetary policy in emerging economies—raise wide ranging issues on fiscal, monetary, and financial policies.
Filed under: Advanced Economies, Economic Crisis, Economic research, Emerging Markets, Europe, Financial Crisis, Fiscal policy, Globalization, IMF, Politics | Tagged: capital flows, central banks, European Central Bank, exchange rate, Jacques Polak Annual Research Conference, Olivier Blanchard, sovereign debt, spillovers, surveillance, trade, U.S. monetary policy, unconventional monetary policy | Leave a comment »