Posted on April 21, 2015 by iMFdirect
By iMFdirect editors
All happy countries are alike; each unhappy country is unhappy in its own way.
This twist on Tolstoy’s Anna Karenina echoed through the seminars during the IMF’s Spring Meetings as most countries, while recovering, are struggling with the prospect of lower potential growth and the “new mediocre” becoming a “new reality.”
Our editors fanned out to cover what officials and civil society had to say about how to help countries pave their own path to happiness.
Filed under: Advanced Economies, Africa, Annual Meetings, Asia, Economic outlook, Economic research, Emerging Markets, Employment, Europe, Finance, Global Governance, Globalization, growth, IMF, International Monetary Fund, Investment, Multilateral Cooperation | Tagged: Africa, Asia, Climate change, commodiity prices, development financing, fuel price subsidy, global economy, IMF-World Bank Spring Meetings, inflation, infrastructure, islamic finance, Middle East and North Africa, Millennium Development Goals, oil prices, public debt, Spring Meetings, trade | Leave a comment »
Posted on April 14, 2015 by iMFdirect
By Olivier Blanchard
(Versions in عربي and Español)
In our April 2015 World Economic Outlook, we forecast global growth to be roughly the same this year than last year, 3.5% versus 3.4%. This global number reflects an increase in growth in advanced economies, 2.4% versus 1.8%, offset by a decrease in growth in emerging market and developing economies, 4.3% versus 4.6% last year. In short, to repeat the words used by the IMF Managing Director last week, we see growth as “moderate and uneven”.
Behind these numbers lies an unusually complex set of forces shaping the world economy. Some, such as the decline in the price of oil and the evolution of exchange rates, are highly visible. Some, from crisis legacies to lower potential growth, play more of a role behind the scene but are important nevertheless. Let me briefly review them.
Filed under: Advanced Economies, Annual Meetings, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Globalization, Government, growth, IMF, International Monetary Fund, Investment, Middle East, Reform | Tagged: Brazil, China, euro area crisis, exchange rate, forecast, Greece, India, infrastructure, investment, Japan, Middle East, oil exporters, oil importers, oil prices, Olivier Blanchard, Russia, Ukraine, United States, WEO, World Economic Outlook | Leave a comment »
Posted on April 7, 2015 by iMFdirect
By Aqib Aslam, Daniel Leigh, and Seok Gil Park
(Versions in عربي, 中文, Français, 日本語, Русский, and Español)
The debate continues on why businesses aren’t investing more in machinery, equipment and plants. In advanced economies, business investment—the largest component of private investment—has contracted much more since the global financial crisis than after previous recession. And there are worrying signs that this has eroded long-term economic growth.
Getting the diagnosis right is critical for devising policies to encourage firms to invest more. If low investment is merely a symptom of a weak economic environment, with firms responding to weak sales, then calls for expanding overall economic activity could be justified. If, on the other hand, special impediments are mainly to blame, such as policy uncertainty or financial sector weaknesses, as some suggest, then these must be removed before investment can rise.
Filed under: Advanced Economies, Annual Meetings, Economic Crisis, Economic outlook, Economic research, Financial Crisis, Globalization, growth, IMF, International Monetary Fund, Investment, Reform | Tagged: euro area, fiscal policy, infrastructure, infrastructure investment, investment, monetary policy, sovereign debt, WEO, World Economic Outlook | Leave a comment »
Posted on April 6, 2015 by iMFdirect
By Mohamed Norat, Marco Pinon and Zeine Zeidane
(Versions in عربي)
Since the global financial crisis, policymakers have sought to press the “reset” button to strengthen financial intermediation that is performed by conventional banks and non-bank financial institutions. The aim has been to address the fault lines that helped trigger one of the most devastating financial crises in a century, and to enable a more inclusive, stable financial system that promotes stability as well as economic development and growth.
Islamic finance offers several features that are consistent with these objectives. Islamic finance refers to financial services that conform with Islamic jurisprudence, or Shari’ah, which bans interest, speculation, gambling and short-sales; requires fair treatment; and institutes sanctity of contracts. And these principles hold the promise of supporting financial stability, since a key tenet of Islamic finance is that lenders should share in both the risks and rewards of the projects and loans they finance.
Filed under: Asia, Economic research, Emerging Markets, Financial regulation, Fiscal policy, Globalization, Government, growth, IMF, International Monetary Fund, Investment, Middle East | Tagged: Asia, financial crisis, Hong Kong, Islamic banking, islamic finance, Luxembourg, Middle East, real estate, senegal, Shariah, South Africa, sukuk, tax, United Kingdom | Leave a comment »
Posted on April 2, 2015 by iMFdirect
By Olivier Blanchard
Seven years since the onset of the global financial crisis, we are still assessing how the crisis should change our views about macroeconomic policy. To take stock, the IMF organized two conferences, the first in 2011, the second in 2013, and published the proceedings in two books, titled “In the Wake of the Crisis” and “What Have We Learned?“.
The time seems right for a third assessment. Research has continued, policies have been tried, and the debates have been intense. But have we truly made much progress? Are we closer to a new framework? To address these questions, Raghuram Rajan, Ken Rogoff, Larry Summers and I are organizing a third conference, “Rethinking Macro Policy III: Progress or Confusion?” that will take place on April 15-16 at the IMF.
Filed under: Advanced Economies, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Financial Crisis, Fiscal policy, Globalization, growth, IMF, International Monetary Fund, Investment, Multilateral Cooperation | Tagged: capital inflows, central banks, exchange rate, financial system, fiscal policy, IMF Annual Research Conference, macroeconomic policy, macroprudential policy, monetary policy, Olivier Blanchard | 1 Comment »
Posted on March 26, 2015 by iMFdirect
By Olivier Blanchard, Atish R. Ghosh, Mahvash S. Qureshi
As with previous crises, the global financial crisis has prompted greater calls for international policy cooperation, but it still remains very much like Nessie, the lovable Loch Ness monster: oft-discussed, seldom seen. To reflect on the obstacles to international policy cooperation, and how to make progress, the IMF recently hosted a panel discussion, Toward a More Cooperative International Monetary System: Perspectives from the Past, Prospects for the Future, with Maurice Obstfeld (CEA; University of Berkley), José Antonio Ocampo (Columbia University), Alexandre Swoboda (The Graduate Institute, Geneva), and Paul Volcker (Former Chairman, Federal Reserve).
Filed under: Economic Crisis, Economic outlook, Economic research, Global Governance, Globalization, growth, IMF, International Monetary Fund, Multilateral Cooperation, Politics, Reform | Tagged: capital flows, exchange rate, G-20, health care, international monetary system, international policy coordination, liquidity, Olivier Blanchard, trade | Leave a comment »
Posted on March 9, 2015 by iMFdirect
By Hamid Faruqee and Andrea Pescatori
(Version in Français)
In the aftermath of the 2008 financial crisis, Canada’s financial system held up remarkably well—making it the envy of its Group of Seven peers. This relative resilience was particularly impressive considering its most important trading and financial partner, the United States, was the epicenter of the crisis.
Part of Canada’s success story lies in the fact that its banking system is dominated by a handful of large players who are well capitalized and have safe, conservative, and profitable business models concentrated in mortgage lending—much of it covered by mortgage insurance and backstopped by the federal government. Notwithstanding such an enviable record and sound financial system, we need to keep an eye on certain financial risks.
Filed under: Advanced Economies, Economic outlook, Economic research, Finance, Financial Crisis, G-20, growth, IMF, International Monetary Fund, Investment | Tagged: bank lending, Canada, financial crisis, house prices, housing, housing market, loan-to-value ratio, mortgages, OECD, oil prices, trade, U.S. | 2 Comments »