Posted on November 19, 2010 by iMFdirect
By Olivier Blanchard
The crisis has forced economists and policymakers to go back to their drawing boards. Where did they go wrong, and what implications does the crisis have for both macroeconomic theory and macroeconomic policy making?
This was the topic of this year’s IMF Jacques Polak Research Conference. The conference was the first since the passing of Jacques Polak, after whom the conference has been named, and to which he came every year until last year. Present at the Fund’s creation and a long time Fund economist, Jacques had been described by the Managing Director as “a leader of critical thought during the post-war evolution of the global economy.” As such, this conference, and its focus on the post-crisis evolution of the global economy, was fitting a fitting tribute to Jacques. We shall miss him.
The twelve papers presented at the conference provided rich fodder for discussion. For two days, researchers and policymakers explored the contours of policy making in the post-crisis world. I want to share with you some of the major themes: (more…)
Filed under: Advanced Economies, Economic Crisis, Financial Crisis, Financial regulation, IMF, International Monetary Fund | Tagged: capital flows, financial integration, financial markets, Financial regulation, financial sector, financial stability, fiscal consolidation, fiscal policy, fiscal space, Fiscal Stimulus, fiscal sustainability, hot money, IMF Jacques Polak Research Conference, Jacques Polak, macroprudential regulation, monetary policy, monetary policy rule, risk aversion | 4 Comments »
Posted on May 25, 2010 by iMFdirect
By Masood Ahmed
In the midst of an early and uncertain economic recovery from the global crisis, countries in the Middle East and North Africa (MENA) region have been experiencing a sharp slowdown in the growth of credit to the private sector, by about 30 percentage points on average relative to precrisis peak rates.
For many sectors, firms, and households that depend on bank financing, this slowdown may be forcing them to scale back their spending plans, or to resort to scarce or costly alternative avenues for financing. Slow credit growth may therefore be constraining the strength of the recovery in the short run, in addition to limiting prospects for longer-term growth. Policymakers are understandably concerned.
Filed under: Economic Crisis, Economic research, Financial Crisis, IMF | Tagged: balance sheets, bank funding, bank profitability, capital losses, countercyclical policy, credit culture, credit demand, credit growth, Iran, Jordan, Kuwait, lending, liquidity, Morocco, nonperforming loans, private sector, Qatar, risk aversion, Saudi Arabia, supply side, UAE | 4 Comments »
Posted on May 18, 2010 by iMFdirect
By Anoop Singh
As I have highlighted in previous posts, Asia has been leading the global recovery and it is expected to continue doing so in the near term.
Not only has Asia’s rapid growth helped output return to pre-crisis levels relatively quickly, it has attracted large capital inflows into the region. Foreign capital has poured in, attracted by Asia’s strong fundamentals and bright growth prospects. Portfolio and cross border banking flows have rebounded sharply as financial conditions normalized.
Looking ahead, our growth projections suggest that Asia is expected to outperform advanced countries. As a result, the region is likely to continue to attract significant capital inflows, assuming that fallout from the euro zone sovereign debt crisis is contained and that the recent spike in global risk aversion abates.
Filed under: Asia, Economic Crisis, Economic research, Financial Crisis, IMF | Tagged: capital inflows, China, debt crisis, domestic demand, foreign investors, Hong Kong, infrastructure development, investment climate, labor market, price bubbles, property prices, risk aversion | 1 Comment »
Posted on May 4, 2010 by iMFdirect
By Nicolás Eyzaguirre
Versión en Español
Not so long after the global financial crisis, the supply of foreign financing has become abundant, and cheap, for many emerging market countries. This sounds like good news for Latin America, and it is—creating opportunities for debt management, saving on interest paid to foreigners, and expanding opportunities for investment. But it also comes with a number of potential risks that need to be managed.
Our new Regional Economic Outlook for the Western Hemisphere takes an in-depth look at the risks arising from what we call “easy external financial conditions.” There we analyze how the more financially integrated economies of Latin America have responded to such conditions in the past, with comparison to countries of other regions. Our comparisons focus especially on a group of advanced economies—Canada, Australia and New Zealand, and Norway—that also are commodity exporters, as well as being inflation targeters with highly flexible exchange rates.
Filed under: Advanced Economies, Economic Crisis, Emerging Markets, growth, Latin America | Tagged: bond spreads, capital inflows, commodity exporters, credit booms, debt management, exchange rates, foreign financing, private spending, risk aversion | 4 Comments »