Posted on January 8, 2014 by iMFdirect
By Christine Lagarde
For yet a third year I have kept my tradition of starting the New Year with a visit to Sub-Saharan Africa—a region that truly offers great promise! As the world economy has remained focused on the crisis of the advanced economies, Africa has quietly forged ahead with strong growth led by a vibrant private sector and surging foreign investment. Over the past decade Sub-Saharan Africa has posted growth averaging 5.6 percent a year.
The countries of East Africa have done especially well. So what better place to begin my travels this year than in Kenya, which has emerged as one of the region’s “frontier economies”—countries whose recent performance is propelling them toward middle-income status.
Filed under: Africa, Emerging Markets, Employment, growth, IMF, International Monetary Fund, Low-income countries | Tagged: Africa, business, development, fiscal policy, growth, iMFdirect, infrastructure, International Monetary Fund, jobs, Kenya, regional integration, Sub-Saharan Africa | 1 Comment »
Posted on December 11, 2013 by iMFdirect
By Alejandro Werner
(Versions Español and Português)
Public finances in most Latin American countries strengthened significantly before the global financial crisis. Since 2009, countries have generally increased public deficits, drawing down on their fiscal coffers.
These expansionary policies continue and are yet to be reversed. With further pressures likely to build over the period ahead—as economic growth has slowed, commodity prices have softened, and external funding costs are bound to rise—now is the right time to rethink fiscal policies across the region.
Filed under: Economic research, Emerging Markets, Financial Crisis, Fiscal policy, growth, IMF, International Monetary Fund, Latin America, Public debt | Tagged: Brazil, Chile, Colombia, fiscal policy, Fiscal Stimulus, infrastructure, labor market, Mexico, Peru, public deficits, public finances, public spending | Leave a comment »
Posted on November 19, 2013 by iMFdirect
By Olivier Blanchard
(Version in Español)
Two weeks ago, the IMF organized a major research conference, in honor of Stanley Fischer, on lessons from the crisis. Here is my take. I shall focus on what I see as the lessons for monetary policy, but before I do this, let me mention two other important conclusions.
One, having your macro house in order pays off when there is an (external) crisis. In contrast to previous episodes, wise fiscal policy before this crisis gave emerging market countries the room to pursue countercyclical fiscal policies during the crisis, and this made a substantial difference.
Second, after a financial crisis, it is essential to rapidly clean up and recapitalize the banks. This did not happen in Japan in the 1990s, and was costly. But it did happen in the US in this crisis, and it helped the recovery.
Now let me now turn to monetary policy, and touch on three issues: the implications of the liquidity trap, the provision of liquidity, and the management of capital flows.
Filed under: Advanced Economies, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Financial Crisis, Fiscal policy, IMF, International Monetary Fund, Multilateral Cooperation | Tagged: capital flows, exchange rate, financial crisis, fiscal policy, IMF Annual Research Conference, IMF Jacques Polak Research Conference, inflation, monetary policy, Olivier Blanchard, Paul Krugman, stanley Fischer | 2 Comments »
Posted on November 1, 2013 by iMFdirect
By Olivier Blanchard
Several years out from the global financial crisis, the world economy is still confronting its painful legacies. Many countries are suffering from lackluster recoveries coupled with high and persistent unemployment. Policymakers are tackling the costs stemming from the crisis, managing the transition from crisis-era policies, and trying to adapt to the associated cross-border spillovers.
Against this background, the IMF’s 14th Jacques Polak Annual Research Conference, entitled “Crises: Yesterday and Today,” to take place on November 7-8, will take stock of our understanding of past and present crises.
This year’s conference will be a special one as we shall honor Stanley Fischer’s many contributions to economic research and policy. Stan has extensively studied economic and financial crises, first as a faculty member at the Massachusetts Institute of Technology, and then as a policymaker with many hats over the years―the Chief Economist of the World Bank, the First Deputy Managing Director of the IMF, and the Governor of the Bank of Israel.
Filed under: Asia, Economic Crisis, Economic outlook, Economic research, Europe, Finance, Fiscal policy, Global Governance, IMF, International Monetary Fund, Latin America, Multilateral Cooperation | Tagged: central banks, East Asia, financial stability, fiscal policy, IMF Annual Research Conference, IMF Jacques Polak Research Conference, interest rates, Japan, Latin America, macroeconomics, Olivier Blanchard, Paul Krugman, stanley Fischer, United States | 2 Comments »
Posted on August 5, 2013 by iMFdirect
By Jerry Schiff
(Versions in 日本語l and 中文)
Discussions in Japan of the “three arrows” of Abenomics—the three major components of Prime Minister Shinzo Abe’s economic plan to reflate the economy—are rampant among its citizens as well as economists, journalists and policy-makers worldwide. Even J-Pop groups are recording paeans to the economic policy named after the newly-elected premier. It is clear that “Abenomics” has been a remarkable branding success. But will it equally be an economic triumph?
We think it can be, and initial signs are positive. But such success is not assured. It will require difficult decisions as the country moves into largely uncharted territory. And much will depend on changing expectations within the country.
Filed under: Advanced Economies, Asia, Economic Crisis, Finance, growth, IMF, International Monetary Fund, Public debt | Tagged: Abenomics, Article IV, Bank of Japan, deflation, fiscal policy, growth, IMF, iMFdirect, International Monetary Fund, investment, Japan, monetary policy, public debt, quantitative easing, stimulus | 1 Comment »
Posted on July 24, 2013 by iMFdirect
By Carlo Cottarelli
Recent political and social unrest in some emerging and developing countries may have idiosyncratic features. But they also have a common denominator: a yearning for more equality in incomes, economic self-determination, and political power. Are these developments in seemingly unrelated emerging economies the beginning of a trend?
Simple—some would say simplistic!—empirical evidence suggests that this may indeed be the case: look at the convergence of real per capita GDP in emerging markets to the level observed in Western Europe and the United States in the early sixties (see chart 1). One can conjecture that, once per capita income achieves this level, the rise of the middle class prompts demands for more equity in the distribution of economic and political power. We know the sixties. It was a time when the rise of the middle class led to a wave of social unrest and change that rocked the economy and society—a change that gradually spread throughout the western world (what we now call “advanced economies”), with a call for more social justice, more democracy, and a better life for everyone. What followed were deep social and economic transformations.
Filed under: Advanced Economies, Economic Crisis, Emerging Markets, Finance, Fiscal policy, growth, IMF, International Monetary Fund, Public debt | Tagged: fiscal policy, GDP, interest rates, public spending, taxes | 1 Comment »
Posted on July 3, 2013 by iMFdirect
By Min Zhu
In the last two decades, countries have come a long way in shedding greater light on their public finances. The global economic crisis has reminded us, however, that we need to do more to ensure fiscal policymaking is based on reliable data on fiscal outcomes, credible forecasts of fiscal prospects, and a comprehensive assessment of fiscal risks. Working with civil society, governments, and others, the IMF has just presented a revised draft of its Fiscal Transparency Code, and we would like to know what you think of it so we can improve it further. You can comment here.
Filed under: Economic research, Emerging Markets, Finance, Financial Crisis, Financial regulation, Fiscal policy, IMF, International Monetary Fund, Politics, Public debt | Tagged: financial sector, fiscal policy, fiscal transparency, government, Greece, public finances | Leave a comment »