Posted on November 24, 2015 by iMFdirect
By Davide Furceri and Prakash Loungani
It is well accepted that trade generates winners and losers. The past few decades have seen increases not just in trade in goods and services but trade in assets, as countries relax restrictions on the ability of capital to flow across national boundaries. Surprisingly, while the impact of trade in goods and services on inequality has been extensively studied, little attention has been paid to the distributional impacts of opening up capital markets. Our paper fills this gap.
Filed under: Economic outlook, Economic research, International Monetary Fund | Tagged: capital accounts, capital flows, Chinn-Ito index, gini coefficient, IMF, iMFdirect, inequality, International Monetary Fund, markets, trade liberalization, trade openness | Leave a comment »
Posted on May 19, 2014 by iMFdirect
By Min Zhu
(Version in 中文,Français, Português, and Español)
There is a group of fast-growing low-income countries that are attracting international investor interest—frontier economies. Understanding who they are, how they are different, and how they have moved themselves to the frontier matters for the global economy because they combine huge potential with big risks.
Get to know them
The first thing to note is that some of these countries already have moved to the lower-middle income group. While a working definition of frontier economies is subject to further discussion, broadly speaking, these countries have been deepening their financial markets, such as Bangladesh, Kenya, Nigeria, Mozambique, and Vietnam.
Filed under: Africa, Asia, Emerging Markets, growth, IMF, International Monetary Fund, Investment, LICs, Low-income countries | Tagged: Bangladesh, Bolivia, fiscal policy, Ghana, iMFdirect, Kenya, monetary policy, Mozambique, Nigeria, services sector, Tanzania, Vietnam | Leave a comment »
Posted on May 14, 2014 by iMFdirect
By Luc Laeven, Lev Ratnovski, and Hui Tong
Large banks were at the center of the recent financial crisis. The public dismay at costly but necessary bailouts of “too-big-to-fail” banks has triggered an active debate on the optimal size and range of activities of banks.
But this debate remains inconclusive, in part because the economics of an “optimal” bank size is far from clear. Our recent study tries to fill this gap by summarizing what we know about large banks using data for a large cross-section of banking firms in 52 countries.
We find that while large banks are riskier, and create most of the systemic risk in the financial system, it is difficult to determine an “optimal” bank size. In this setting, we find that the best policy option may not be outright restrictions on bank size, but capital—requiring large banks to hold more capital—and better bank resolution and governance.
Filed under: Economic research, Finance, Financial Crisis, Financial regulation, Fiscal, Fiscal policy, Government, International Monetary Fund, Reform | Tagged: banking regulation, banks, big banks, financial markets, Financial regulation, financial stability, Global Financial Stability Report, IMF, iMFdirect, iMFdirect blog, International Monetary Fund, monetary policy | Leave a comment »
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 18, 2013 by iMFdirect
By Era Dabla-Norris and Kalpana Kochar
(Version in Español)
The era of remarkable growth in many emerging market economies fueled by cheap money and high commodity prices may very well be coming to an end.
The slowdown reflects not just inadequate global demand, but also structural factors that are rendering previous growth engines less effective, and the fact that economic “good times” reduced the incentives to implement further reforms to enhance productivity. With the end of the period of favorable global financing and trade conditions, the time is nigh for governments to make strong efforts to increase productivity—the essential foundation of sustainable growth and rising living standards. Continue reading
Filed under: Asia, Economic research, Emerging Markets, Employment, Finance, Financial regulation, growth, IMF, International Monetary Fund, Latin America | Tagged: emerging markets, employment, financial markets, Financial regulation, financial supervision, growth, iMFdirect, infrastructure, International Monetary Fund, Labor, productivity | 1 Comment »
Posted on October 29, 2013 by iMFdirect
By Steven Barnett
(Version in 中文)
Less growth in China today will mean higher income in the future. So rather than worry, we should welcome the slowdown in China’s economy. Why? Because by favoring structural reforms over short-term stimulus, China’s leadership is illustrating their commitment to move to a more balanced and sustainable growth model.
Filed under: Asia, Economic outlook, Economic research, Emerging Markets, Finance, growth, IMF, International Monetary Fund, Public debt | Tagged: China, consumption, government finances, IMF, iMFdirect, investment, reform, sustainable growth, United States | 3 Comments »
Posted on October 11, 2013 by iMFdirect
By Nemat Shafik
Europe faces a stark choice: risk stagnation or pursue integration. It can continue to muddle through, and hope that growth in the world economy will eventually pick up enough steam to pull its economy out of the doldrums. Or it can make a decisive push to revitalize its economy and complete the reforms needed to achieve a fully integrated economic and monetary union
Five years into the crisis, recovery in the euro area remains fragile. Important actions at both the national and euro-wide levels have tackled the immediate threats to the single currency. These include the European Central Bank’s announcement in 2012 that it stands ready to undertake outright monetary transactions in secondary sovereign bond markets, the completion of the European Stability Mechanism, which created a financial firewall around the euro area, and efforts to restore the health of public finances and implement structural reforms.
Filed under: Advanced Economies, Economic Crisis, Employment, Europe, Finance, Fiscal policy, growth, International Monetary Fund | Tagged: banking union, euro area, Europe, iMFdirect, Nemat Shafik, public finances, structural reforms | Leave a comment »