Posted on December 15, 2014 by iMFdirect
By Gregorio Impavido and Uffe Mikkelsen
(Version in Türk)
Turkey is going through a time of economic transition, with slowing growth that risks the country being caught in a “middle-income trap,” unable to join the ranks of high income economies.
The country grew at 6 percent per year on average in the period 2010-13, with policies supportive of domestic consumption. This has generated a large current account deficit, mostly financed by short-term capital flows. The reliance on consumption at the expense of investment, slow export growth, and sizable investment needs have hurt potential growth, with the economy already growing more modestly. Moreover, Turkey’s low domestic savings and competitiveness challenges have limited investment as well as exports, which have also suffered from the slow growth in Europe.
With current policies, Turkey’s economy is expected to grow only 3.5 percent annually over the next five years. Going forward, the economy must be rebalanced to make it more competitive and to restore output and employment growth.
Filed under: Economic outlook, Economic research, Employment, Europe, Finance, Financial Crisis, Fiscal policy, growth, IMF, International Monetary Fund, Investment, Public debt, Reform | Tagged: Article IV, banking sector, economic rebalancing, Europe, fiscal policy, inflation, Macroeconomic policies, middle income countries, savings, Turkey | Leave a comment »
Posted on November 19, 2014 by iMFdirect
By Davide Furceri and Prakash Loungani
(version in Español, Français, 中文, Русский, عربي, 日本語)
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 5, 2014 by iMFdirect
By Deniz Igan
(version in Español)
There was a time in the not-so-distant past when science fiction could make us look forward to a better world. We had uplifting visions of the future in shows like Star Trek and Back to the Future. Today, the menu of options only offers a dystopian world ruined by poverty and violence (think The Hunger Games, Divergent, or Elysium).
It sure is easy to get pessimistic these days. Six years after the financial crisis, the recovery in the United States has been fragile and weaker than anything we have seen in the post-WWII period. Growth figures, in large part, have been serial disappointments, disrupted by government shutdowns, debt ceiling showdowns, or meteorologically-triggered slowdowns.
Filed under: Advanced Economies, Economic Crisis, Economic outlook, Economic research, Employment, Financial Crisis, Fiscal, Fiscal policy, Government, growth, Politics, Reform | Tagged: Article IV, deficit, education, global financial crisis, immigration, infrastructure, labor force, recovery, tax reform, United States | Leave a comment »
Posted on October 29, 2014 by iMFdirect
By Bertrand Gruss
(version in Español and Português)
It looks as if labor markets in Latin America have not been following the economic news—literally! Economic activity has slowed markedly in the last three years, with some South American countries slipping into outright recession more recently. Yet, labor markets still appear remarkably strong, with unemployment rates, in particular, hovering at record-low levels in most countries (Figure 1). So, what is going on? Has the region discovered how to defy the law of gravity?
Filed under: Economic Crisis, Economic outlook, Economic research, Emerging Markets, Employment, growth, IMF, International Monetary Fund, Latin America, Reform, unemployment | Tagged: Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, education, infrastructure, labor market, Latin America, Mexico, Peru, Regional Economic Outlook: Western Hemisphere, South America, unemployment rate, Uruguay | Leave a comment »
Posted on October 23, 2014 by iMFdirect
By Prakash Loungani
(version in 中文)
Raising the minimum wage is a polarizing issue. One side worries that raising it will lower employment. The other side downplays the impact on employment and plays up the positive impact on the living standards of the poor. Both sides are able to cling to their beliefs as the evidence, much of which comes from high-income (“advanced”) economies, is mixed.
The majority of the global labor force, however, is in the emerging markets. Moreover, for a number of these countries, instituting a minimum wage or raising it is squarely on the policy agenda. But little is known about the impacts of minimum wages on employment and living standards in emerging markets.
Filed under: Advanced Economies, Asia, Economic outlook, Economic research, Emerging Markets, Employment, Fiscal policy, Global Governance, growth, IMF, Inequality, International Monetary Fund, unemployment | Tagged: China, employment, income, labor force, labor market, manufacturing, minimum wage | Leave a comment »
Posted on October 15, 2014 by iMFdirect
By Fabio Cortes, David Jones and Evan Papageorgiou
Low interest rates and other central bank policies in the United States have sent investors looking for higher returns on their investments. Money is pouring into mutual funds and exchange-traded funds, which is fueling a mispricing of credit and a build-up of risks to liquidity in the markets—the ability to trade in assets of any size, at any time, and to find a ready buyer.
Mutual funds and exchange-trade funds are the largest owners of U.S. corporate and foreign bonds (Chart 1). This means they provide a lot of credit to grease the wheels of the financial system because they have taken investors’ money and lent it to corporates.
Filed under: Advanced Economies, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Employment, growth, IMF, International Monetary Fund, Reform | Tagged: central bank, exchange-traded funds, Global Financial Stability Report, liquidity, liquidity mismatch, monetary policy, money market mutual funds, United States | Leave a comment »
Posted on October 14, 2014 by iMFdirect
By iMFdirect editors
What a week it’s been. Practical and existential questions on how to do good and be good for the sake of the global economy and finance dominated the seminars at the IMF’s Annual Meetings in Washington.
Our editors fanned out to cover what the panelists, moderators, and audiences said in a variety of seminars, and two big themes caught our eye.
Filed under: Advanced Economies, Annual Meetings, Asia, Civil Society, Economic outlook, Emerging Markets, Employment, Europe, Financial Crisis, Global Governance, growth, IMF, Inequality, International Monetary Fund, Investment | Tagged: Archbishop of Canterbury, Christine Lagarde, ethics, Europe, G-20, inequality, infrastructure, jobs, Larry Summers, Paul Krugman, seminars, shadow banking, Stanley Fisher, technology, unemployment, women | Leave a comment »