Posted on August 27, 2015 by iMFdirect
By Jeff Hayden
Between 2004 and 2013, Latin America recorded impressive growth and strong progress on a range of social issues. High commodity prices combined with strengthened economic management and progressive social policies to propel the region forward.
This strength was all the more striking against the backdrop of the 2008–09 global financial crisis, which mired many advanced economies in recession but saw emerging markets, including many in Latin America, power ahead. This led some observers to dub the period the “Latin American decade.”
Now, as the world’s economic leaders prepare to gather in Lima, Peru, in October for the Annual Meetings of the International Monetary Fund and the World Bank, the picture looks quite different.
Filed under: Annual Meetings, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Employment, Español, Financial Crisis, Fiscal policy, Globalization, growth, IMF, Inequality, International Monetary Fund, Investment, Latin America, Reform | Tagged: commodiity prices, corruption, F&D, Finance & Development. F&D, inequality, islamic finance, labor force, Latin America, trade | Leave a comment »
Posted on August 24, 2015 by iMFdirect
By Giovanni Ganelli and Naoko Miake
(Version in 日本語)
Take a walk in Tokyo, and you will see the sign スタッフ募集中, or “Staff Wanted”, outside many restaurants and convenience stores. These businesses often find it impossible to recruit the workers they need. According to recent statistics, for each job seeker in Japan applying to work as a waiter, there are more than three available positions. Home helpers and long-term caregivers are equally in demand. If you want to work as a security guard, you can choose from around five openings, and for some positions in the construction business the job-to-applicant ratio is over six.
Japan’s labor shortages are the result of both a shrinking population—which limits the overall pool of workers—and skill mismatches. The reduced supply of labor is one of the factors bringing down medium-term potential growth, which the International Monetary Fund estimates at just 0.6 percent. Labor market shortages are also bad for short-term growth, because they reduce the effectiveness of the monetary and fiscal stimulus that the authorities are using to try to boost demand.
Filed under: Advanced Economies, Asia, Economic outlook, Economic research, Emerging Markets, Employment, Fiscal policy, growth, IMF, Inequality, International Monetary Fund, Investment, Reform, unemployment | Tagged: Abenomics, female labor participation, immigration, investment, Japan, jobs, labor market, women | Leave a comment »
Posted on August 12, 2015 by iMFdirect
By Francesco Grigoli, Alexander Herman, Andrew Swiston, and Gabriel Di Bella
(Version in Español and Português)
In the wake of the global financial crisis, monetary and fiscal policies were used aggressively to counteract the effects of the crisis on economic activity. Policymakers look at a number of indicators to guide them in assessing an economy’s level of activity relative to its productive capacity. But trying to figure out the position of the economy in real time is often quite challenging, with consequences for setting policy.
In the case of Brazil in 2011, for example, policymakers estimated in real time that the economy was at a level of output consistent with its productive capacity. Over time, however, the assessment of the cyclical position of the Brazilian economy changed drastically. It had not just been at full capacity, but was overheating. The economy was actually facing inflationary pressures, requiring policy tightening to bring it back to the central bank’s target.
Filed under: Economic Crisis, Economic outlook, Economic research, Emerging Markets, Español, Finance, Fiscal policy, growth, IMF, International Monetary Fund, Investment, Latin America, Public debt | Tagged: Brazil, central bank, Chile, Colombia, fiscal policies, inflation, Latin America, macroeconomics, Mexico, monetary policy, Peru | Leave a comment »
Posted on August 3, 2015 by iMFdirect
By Antoinette M. Sayeh and Abebe Aemro Selassie
If, as has been observed, demography is destiny, this will be the African century.
Most countries in sub-Saharan Africa are on the cusp of a demographic transition—the years when the share of young and old in the population declines and those in working age range (15-64 years) increases.
Elsewhere, this transition has generally been accompanied by higher savings, incomes, and economic growth. Our latest Regional Economic Outlook for sub-Saharan Africa looks at how the transition might play out and the implications for economic policies.
Filed under: Africa, Economic outlook, Economic research, Emerging Markets, Employment, Financial Crisis, Fiscal policy, growth, IMF, Inequality, International Monetary Fund, Investment, LICs, Low-income countries, Reform | Tagged: Africa, economic growth, emerging market, income, labor force, Regional Economic Outlook: Sub-Saharan Africa, Sub-Saharan Africa | 1 Comment »
Posted on July 22, 2015 by iMFdirect
By Andre Meier and Fabiano Rodrigues Bastos
(Versions in Español and Português)
Latin America’s recent economic fortunes highlight the region’s closer economic ties with Asia. China, in particular, has grown into a crucial source of demand for Latin American commodities over the past two decades, providing significant gains to the region. The flip side is that the ongoing structural slowdown of Chinese investment is weighing considerably on the prices of those commodities, and the countries that export them.
But Asia can be much more than just a source of episodic windfall gains (and losses) for Latin America. Like a windmill, Asia could help to power a stronger Latin American economy—by providing an example of successful regional trade integration and through greater direct links across the Pacific that benefit both sides. However, securing these benefits will require clear and realistic objectives, a long-term strategy, and attention to the political and social implications of greater economic integration.
Filed under: Advanced Economies, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Finance, Financial Crisis, Fiscal policy, Globalization, growth, IMF, International Monetary Fund, Investment, Latin America | Tagged: Asia, Brazil, Caribbean, Chile, China, foreign direct investment, India, international trade, investment, Japan, Korea, Latin America, Mexico, Peru, trade | Leave a comment »
Posted on July 20, 2015 by iMFdirect
By David Lipton
Why have businesses in advanced economies not been investing more in machinery, equipment and plants? Business investment is the largest component of private investment, and its weakness has puzzled many of us.
Some believe that the key to more business investment is less uncertainty about fiscal policy, regulation, and structural reforms. Some believe that it is providing better financing, including for small and medium-sized enterprises (SMEs).
Filed under: Advanced Economies, Economic outlook, Economic research, Emerging Markets, Fiscal policy, growth, IMF, International Monetary Fund, Investment, Public debt | Tagged: David Lipton, fiscal policy, infrastructure, investment, monetary policy, public investment, recession, World Economic Outlook | Leave a comment »
Posted on July 1, 2015 by iMFdirect
By Stefan Laseen, Andrea Pescatori, and Jarkko Turunen
Academics and policy-makers alike have long struggled with the question of whether to use monetary policy to dampen asset price booms – whether to “lean against the wind” or not. Can officials identify emerging asset price bubbles, what are the implications of bursting them, and is monetary policy the appropriate response to potential bubbles? These questions have become even more important to the policy debate in the wake of the global financial crisis, which was preceded by an unsustainable boom in sub-prime mortgage lending and housing prices.
Given over six years of near zero policy interest rates, should the U.S. Fed now use interest rates to lean against potential financial stability risks that may have built up?
Filed under: Advanced Economies, Economic outlook, Economic research, Employment, Finance, Financial Crisis, Fiscal policy, Government, growth, IMF, International Monetary Fund, Investment, Multilateral Cooperation, Politics | Tagged: Federal Reserve, financial risks, financial stability, inflation, interest rates, investment, macroprudential policy, U.S., U.S. Fed, United States | Leave a comment »