Global Crisis — Top Links from the IMF for Economics and Finance


Our top links for June, 2012 from iMFdirect blog and others:

Latin America—Taking the Helm


By Christine Lagarde

Managing Director of the International Monetary Fund

(Version in Español)

The eyes of the world are locked on Europe these days. This is understandable. After all, the storm in the euro area casts a long shadow over the entire global economy.

But the IMF has 187 members, and my job is to serve each and every one of them as effectively as possible. For this reason, I am making it a point to visit the different regions of the world—to discuss, to listen, to learn.

This week, I am visiting three important countries in Latin America—Brazil, Mexico, and Peru—a trip coinciding with the transfer of leadership in the Group of 20 to Mexico. Like so many in the region, these countries have done remarkably well over the past few years. They have harvested the fruits of strong fundamentals, sound policy frameworks, and prudent macroeconomic policies and are now enjoying sustained growth with reduced vulnerabilities—an enviable sweet spot.

Continue reading

Shared Frustrations: How to Make Economic Growth in Sub-Saharan Africa More Inclusive


By Antoinette M. Sayeh

(Version in Français)

Suddenly it’s the thing everyone is talking about. Income inequality. Not just between countries, but inequality within countries.

In North Africa and the Middle East, jobless youth sparked the Arab Spring. In the United States, the growing gap between rich and poor is the “meta concern” of the Occupy Wall Street movement. Worldwide, frustrations appear to be on the rise.

What about sub-Saharan Africa? Sustained economic growth has certainly produced some tremendous advances. But a large proportion of the population is still living in poverty. So frustrations about the inclusiveness of growth are also shared within the region.

Complex story

Is the story really as negative in sub-Saharan Africa as the relatively slow reduction in the incidence of poverty and some people’s frustration suggest? Or is the underlying situation a little more complex?

In July, I wrote about the importance of inclusive growth and whether economic growth was a necessary or a sufficient condition for poverty reduction. The IMF’s latest Regional Economic Outlook for Sub-Saharan Africa takes that thinking a step further. The new analysis looks at how living standards for the poorest households have actually been changing in some countries in the region.

Continue reading

The Other Rebalancing: Asia’s Quest for Inclusive Growth


By Anoop Singh

(Versions in 中文, 日本語)

For the past two or three decades, rising inequality—inequality of incomes, of economic outcomes and of economic opportunities—has taken a back seat to the goal of boosting overall growth. But growing discontent with the fallout of the global financial crisis has put inequality back on top of the policy agenda. While the symptoms may be different, tackling inequality is no less an issue in Asia.

Indeed, research shows that inequality can be counterproductive to sustaining longer-term growth. So, in increasingly turbulent global economic times, this gives added importance to promoting shared—or inclusive—growth in Asia that is more likely to be sustained.

This has been a major focus our latest Regional Economic Outlook, which we presented in Manila today. A great challenge for the government here, and for other countries across the region, is to raise living standards for a wide section of their populations. Continue reading

Haves and Have Less—Why Inequality Throws Us Off Balance


Jeremy CliftBy Jeremy Clift

We used to think that overall economic growth would pull everyone up. While the rich might be getting richer, everyone would benefit and would see higher living standards. That was the unspoken bargain of the market system.

But now research is showing that, in many countries, inequality is on the rise and the gap between the rich and the poor is widening, particularly over the past quarter-century.

With taxpayers footing the bill for troubles in the financial industry in advanced economies during the global economic crisis, this discrepancy seems particularly galling to wage-earners who have seen their pay stagnate or worse. Inequality has started to attract more research by economists.

The September 2011 issue of Finance & Development (F&D) looks at income inequality around the world and how it matters. Continue reading

iMFdirect—Our Top 10 Posts


As iMFdirect looks back at two years since our blog on global economics was launched in August 2009, we’ve compiled a list of  the posts that have drawn the most attention.

Collectively, the posts give a snapshot of some of the biggest challenges in the world economy—which because of this summer’s developments remain, in some ways, much the same today as two years ago. It’s worth noting that John Lipsky’s outlook for 2011 listed as the No. 1 downside risk to the global economy: “Renewed turbulence in sovereign debt markets could spill over to the real economy and across regions.”

From the start our aim has been to stimulate debate about global economic issues and to open up discussion, through the blog, to a broader audience. During the past two years we’ve had more than 200 posts from leading economists, including several Nobel Prize winners. Many have been reproduced by other blogs around the world and hundreds of people have provided comment and feedback, and participated in constructive debate.

Here are the iMFdirect posts that have drawn the highest number of views:

1. Ten Commandments for Fiscal Adjustment in Advanced Economies

2. Rewriting the Macroeconomists’ Playbook in the Wake of the Crisis

3. Fair and Substantial—Taxing the Financial Sector

4. 2010 Outlook: New Year, New Decade, New Challenges

5. The Future of Macroeconomic Policy: Nine Tentative Conclusions

6. Nanjing and the New International Monetary System

7. Global Safety Nets: Crisis Prevention in an Age of Uncertainty

8. 2011—A Pivotal Year for Global Cooperation

9. Warning! Inequality May Be Hazardous to Your Growth

10. Thinking Beyond the Crisis: Themes from the IMF’s 10th Annual Research Conference

Let us know what you think and subjects you would like to discuss. What would you like to see more of and what less of? We welcome your views and comments.

Seven Pillars of Prosperity—Diversifying Economic Growth in the Caucasus and Central Asia


By David Owen

(Version in Русский)

Medium-term economic growth prospects in the Caucasus and Central Asia region are strong. But, to secure ongoing prosperity, the eight countries of the region—Armenia, Azerbaijan, Georgia, Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan—will need to look beyond traditional sources of growth.

The challenge for policymakers will be to foster new and more diverse growth drivers, outside mining, oil, and gas.

There are seven policy pillars that can help them do that: Continue reading

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