Posted on January 12, 2015 by iMFdirect
In the end, the case for job rich, inclusive growth is not economic, it’s political, according to Nobel prize-winning economist Michael Spence.
In this podcast with the IMF, Spence discusses the growing sense in many countries that it’s mostly the wealthy population who are reaping the benefits of economic development.
Filed under: Advanced Economies, Economic Crisis, Economic outlook, Employment, Financial Crisis, Global Governance, IMF, International Monetary Fund, Multilateral Cooperation | Tagged: China, economic development, global economy, Great Recession, inclusive growth, infrastructure, investment, Michael Spence, podcasts, public sector | Leave a comment »
Posted on January 7, 2015 by iMFdirect
By Kevin Fletcher and Peter Kunzel
The main features of boom-bust cycles in housing markets are by now all too familiar.
During booms, conditions such as lax lending standards and low interest rates help drive up house prices and with them mortgage debt.
When the bust arrives, over-indebted households find themselves underwater on their mortgages— owing more than their homes are worth.
Feeling the pinch of reduced wealth and access to credit, households, in turn, rein in consumption. At the same time, lower house prices cause investment in new houses to tumble.
Together, these forces significantly depress output and increase unemployment. Non-performing loans increase, and banks respond by tightening credit and lending standards, further depressing house prices and adding to the vicious cycle.
Filed under: Advanced Economies, Economic Crisis, Economic research, Europe, Financial Crisis, growth, IMF, International Monetary Fund, Investment, Transition | Tagged: bank lending, boom-bust cycle, debt, Denmark, house prices, housing market, Ireland, mortgages, Netherlands, private sector, Spain, tax exemptions, United States | Leave a comment »
Posted on December 31, 2014 by iMFdirect
As 2014 draws to a close, we thought you might like a look back at the most read blogs of the year. These are the headlines and ideas that caught your eyes and the list is based on readership. We thought we’d pull them all together for you in one quick read.
Wishing you a wonky & worldy 2015 from all of us at iMFdirect.
Filed under: Advanced Economies, Asia, Economic outlook, Economic research, Emerging Markets, Employment, Europe, Finance, Financial Crisis, Fiscal, Government, growth, IMF, Inequality, International Monetary Fund, Investment, Latin America, Middle East, recession, unemployment | Tagged: carbon pricing, Caribbean, China, deflation, emerging market debt, euro area, house prices, inequality, lowflation, oil, redistribution, Russia, Saudi Arabia, shale oil | Leave a comment »
Posted on December 21, 2014 by iMFdirect
By Benedict Clements, Sanjeev Gupta, and Masahiro Nozaki
(Versions in 中文, Français, 日本語, Русский, and Español)
Improvements in health can have a tremendously positive effect on society’s well-being and the level of economic activity. Indeed, 2013’s path-breaking report by the Lancet Commission indicates that about 11 percent of the economic growth in recent decades can be attributed to these improvements. As such, it makes good sense for macroeconomists to pay attention to health indicators and to the factors that influence them, such as public health spending.
In this context, it is not surprising that the impact of IMF-supported programs on public health spending has generated considerable attention. Previous research, focusing on periods before the global financial crisis, indicates that Fund-supported programs have a positive effect on public health spending (Martin and Segura, 2004; Center for Global Development, 2007; Clements, Gupta and Nozaki, 2013). But does this pattern still hold if we extend the analysis to more recent years? In this blog, we take a fresh look at this evidence for developing economies.
Filed under: Africa, Economic Crisis, Economic research, Financial Crisis, Fiscal policy, Global Governance, Globalization, Government, growth, IMF, International Monetary Fund, Low-income countries, Multilateral Cooperation, Politics, Reform | Tagged: Africa, ebola, health care, health spending, Liberia, public health spending, Sierra Leone, Sub-Saharan Africa, tax reform | Leave a comment »
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 December 10, 2014 by iMFdirect
By Min Zhu
(Versions in 中文 and Español)
For the past decade, house prices have steadily increased in the vast majority of the 30 countries that make up the IMF’s House Price Index for Emerging Markets released today at a conference organized by the IMF and the Indian Institute of Management in Bangalore, India (Figure 1).
The index shows a lull in the aftermath of the global financial crisis, followed by an increase for nine consecutive quarters since 2012. This run-up—four times as fast as that in advanced economies—would be even more pronounced if the larger countries in the group such as China and India receive greater weight in the index.
Filed under: Advanced Economies, Asia, Economic outlook, Economic research, Emerging Markets, Financial Crisis, growth, IMF, International Monetary Fund, Investment | Tagged: China, credit, emerging market, Global House Price Index, house prices, housing market, India, macroprudential policies, Microprudential regulations, Min Zhu, monetary policy, public-private partnerships | Leave a comment »
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 »