Posted on June 22, 2015 by iMFdirect
Inequality is one of the defining issues of our time, so you may want to tune in to this interview with the authors of a new study that shows that higher inequality leads to lower growth. You can also read their blog here.
Filed under: Advanced Economies, Africa, Asia, Civil Society, Economic research, Emerging Markets, Europe, Globalization, growth, IMF, Inequality, International Monetary Fund, Latin America, LICs, Low-income countries, Middle East, Politics, Reform | Tagged: economic growth, emerging markets, income distribution, middle class, poor, trickle down economics | Leave a comment »
Posted on June 14, 2015 by iMFdirect
By Olivier Blanchard
(Versions in 中文, Français, ελληνικά, عربي, and Español)
The status of negotiations between Greece and its official creditors – the European Commission, the ECB and the IMF – dominated headlines last week. At the core of the negotiations is a simple question: How much of an adjustment has to be made by Greece, how much has to be made by its official creditors?
In the program agreed in 2012 by Greece with its European partners, the answer was: Greece was to generate enough of a primary surplus to limit its indebtedness. It also agreed to a number of reforms which should lead to higher growth. In consideration, and subject to Greek implementation of the program, European creditors were to provide the needed financing, and provide debt relief if debt exceeded 120% by the end of the decade.
Filed under: Advanced Economies, Economic Crisis, Economic outlook, Economic research, Employment, Europe, Financial Crisis, Fiscal policy, growth, IMF, International Monetary Fund, Multilateral Cooperation, Politics, Public debt, Reform | Tagged: Europe, European Commission, fiscal adjustment, Greece, Olivier Blanchard, pension, pension reform | 11 Comments »
Posted on May 29, 2015 by iMFdirect
By Jeff Hayden
World leaders will come together three times—in July, September, and December—to press for progress in the fight against poverty and to forge partnerships in support of better-quality life around the world.
In July, government officials and representatives from civil society organizations, donor groups, and the private sector will meet in Addis Ababa, Ethiopia, to secure the financing needed to lift millions out of extreme poverty.
The global community assembles again in New York in September to review progress under the Millennium Development Goals (MDGs), which expire this year, and to adopt new ones—the Sustainable Development Goals (SDGs)—that map out development through 2030.
Filed under: Advanced Economies, Africa, Civil Society, Economic research, Emerging Markets, Employment, Europe, Finance, Fiscal policy, Global Governance, Globalization, Government, IMF, International Monetary Fund, Multilateral Cooperation, Politics, unemployment | Tagged: Africa, Arab Spring, Christine Lagarde, Civil Society, development, development financing, F&D, Finance & Development magazine, infrastructure, Millennium Development Goals, poverty, terrorist financing, unemployment, United Nations, United Nations Conference on Sustainable Development, youth unemployment | Leave a comment »
Posted on May 29, 2015 by iMFdirect
By Petya Koeva Brooks and Gerd Schwartz
The 2008 global financial crisis and its aftermath have tested the European Union’s (EU) fiscal governance framework—the rules, regulations, and procedures that influence how budgetary policy is planned, approved, carried out, and monitored. Given the distinctive nature of EU integration, the framework aims to discipline national fiscal policies to prevent adverse spillovers to other countries and distortions to the conduct of the euro area’s common monetary policy.
The build-up of fiscal imbalances, however, revealed gaps in the framework. Public debt in the European Union soared following the crisis in 2008 to an average of around 95 percent in 2014—almost 30 percentage points above its average pre-crisis level (Chart 1).
Filed under: Advanced Economies, Europe, Finance, Fiscal policy, Global Governance, IMF, International Monetary Fund | Tagged: crisis, debt, EU, euro area, Fiscal Compact, fiscal framework, fiscal policies, imbalances, public debt, Stability and Growth Pact | Leave a comment »
Posted on May 20, 2015 by iMFdirect
By José Viñals
Financial market liquidity can be fleeting. The ability to trade in assets of any size, at any time and to find a ready buyer is not a given. As discussed in some detail last fall in this blog, a number of factors, including the evolving structure of financial markets and some regulations appear to have pushed liquidity into a new realm: markets look susceptible to episodes of high price volatility where liquidity suddenly vanishes.
In our April 2015 Global Financial Stability Report we identify a new aspect to the problem: asset price correlations have risen sharply in the last five years across all major asset classes (see figure). Continue reading
Filed under: Advanced Economies, Emerging Markets, Europe, Finance, IMF, International Monetary Fund | Tagged: bond markets, central banks, euro area, exchange rate, Financial regulation, GFSR, Global Financial Stability Report, Japan, market liquidity, market volatility, monetary policy, oil prices, swap lines, Switzerland, U.S. Fed, United States | Leave a comment »
Posted on May 7, 2015 by iMFdirect
By Shekhar Aiyar, Bergljot Barkbu, and Andreas (Andy) Jobst
If financing is the lifeblood of European small businesses, then the effect of the financial crisis was similar to a cardiac arrest. The flow of affordable credit from banks was choked off and small and medium-sized enterprises (SMEs) were hit hardest. Today, with bank lending still recovering from that shock, smart policy actions could open up securitization as a source of financing to help small businesses start up, flourish and grow.
SMEs are vital to the European economy. They account for 99 out of every 100 businesses, two in every three employees, and 58 cents of each euro of value added of the business sector in Europe. Improving access to finance would therefore not only revive small businesses, but also support a strong and lasting recovery for Europe as a whole.
Filed under: Advanced Economies, Economic Crisis, Economic research, Europe, Finance, Globalization, growth, IMF, International Monetary Fund, Investment, Reform | Tagged: bank lending, bond markets, capital markets, credit, EU, Europe, France, Germany, infrastructure, Italy, private investment, Securitization, small and medium-sized enterprises, Spain | Leave a comment »
Posted on May 5, 2015 by iMFdirect
By Reinout De Bock, Andrea Maechler, and Nobuyasu Sugimoto
(Versions in Français and deutsch)
Low interest rates in the euro area pose substantial challenges to the life insurance industry. Insurers—particularly in Germany and Sweden—offer their clients long-term policies, sometimes more than 30 years, without holding assets of a correspondingly long duration. Moreover, many policies contain generous return guarantees, which are unsustainable in today’s low interest rate environment.
In 2014, stress tests showed European life insurers are vulnerable to a “Japanese-like” scenario.
Filed under: Advanced Economies, Economic outlook, Economic research, Europe, Finance, Fiscal policy, growth, IMF, International Monetary Fund, Multilateral Cooperation, Reform | Tagged: Europe, European Union, Germany, interest rates, Japan, Life insurance, pension, stress tests, Sweden, United States | Leave a comment »