Posted on April 27, 2015 by iMFdirect
By James Daniel and Rachel van Elkan
Since mid-2014, diversity and divergence—applying to countries’ economic situations, policies and performance—have dominated global economic discussions. Differing economic performance in major advanced countries has led to divergent monetary policies.
Both the Bank of Japan and the European Central Bank have started significant expansions of their balance sheets, while the U.S. Federal Reserve has ended its bond-buying program and is expected to start raising rates. This has had many effects, in particular, contributing to a sharp depreciation of the Yen and the Euro against the U.S. dollar (see chart 1).
Filed under: Asia, Economic Crisis, Economic outlook, Economic research, Europe, Finance, Financial Crisis, Fiscal policy, growth, IMF, International Monetary Fund, Reform | Tagged: Australia, Bank of Japan, capital flows, China, European Central Bank, exchange rate, exports, Hong Kong SAR, India, Indonesia, Japan, Korea, macroprudential policy, Malaysia, monetary policy, New Zealand, Philippines, Singapore, Thailand, trade, U.S. Federal Reserve | Leave a comment »
Posted on April 21, 2015 by iMFdirect
By iMFdirect editors
All happy countries are alike; each unhappy country is unhappy in its own way.
This twist on Tolstoy’s Anna Karenina echoed through the seminars during the IMF’s Spring Meetings as most countries, while recovering, are struggling with the prospect of lower potential growth and the “new mediocre” becoming a “new reality.”
Our editors fanned out to cover what officials and civil society had to say about how to help countries pave their own path to happiness.
Filed under: Advanced Economies, Africa, Annual Meetings, Asia, Economic outlook, Economic research, Emerging Markets, Employment, Europe, Finance, Global Governance, Globalization, growth, IMF, International Monetary Fund, Investment, Multilateral Cooperation | Tagged: Africa, Asia, Climate change, commodiity prices, development financing, fuel price subsidy, global economy, IMF-World Bank Spring Meetings, inflation, infrastructure, islamic finance, Middle East and North Africa, Millennium Development Goals, oil prices, public debt, Spring Meetings, trade | Leave a comment »
Posted on March 26, 2015 by iMFdirect
By Olivier Blanchard, Atish R. Ghosh, Mahvash S. Qureshi
As with previous crises, the global financial crisis has prompted greater calls for international policy cooperation, but it still remains very much like Nessie, the lovable Loch Ness monster: oft-discussed, seldom seen. To reflect on the obstacles to international policy cooperation, and how to make progress, the IMF recently hosted a panel discussion, Toward a More Cooperative International Monetary System: Perspectives from the Past, Prospects for the Future, with Maurice Obstfeld (CEA; University of Berkley), José Antonio Ocampo (Columbia University), Alexandre Swoboda (The Graduate Institute, Geneva), and Paul Volcker (Former Chairman, Federal Reserve).
Filed under: Economic Crisis, Economic outlook, Economic research, Global Governance, Globalization, growth, IMF, International Monetary Fund, Multilateral Cooperation, Politics, Reform | Tagged: capital flows, exchange rate, G-20, health care, international monetary system, international policy coordination, liquidity, Olivier Blanchard, trade | Leave a comment »
Posted on March 9, 2015 by iMFdirect
By Hamid Faruqee and Andrea Pescatori
(Version in Français)
In the aftermath of the 2008 financial crisis, Canada’s financial system held up remarkably well—making it the envy of its Group of Seven peers. This relative resilience was particularly impressive considering its most important trading and financial partner, the United States, was the epicenter of the crisis.
Part of Canada’s success story lies in the fact that its banking system is dominated by a handful of large players who are well capitalized and have safe, conservative, and profitable business models concentrated in mortgage lending—much of it covered by mortgage insurance and backstopped by the federal government. Notwithstanding such an enviable record and sound financial system, we need to keep an eye on certain financial risks.
Filed under: Advanced Economies, Economic outlook, Economic research, Finance, Financial Crisis, G-20, growth, IMF, International Monetary Fund, Investment | Tagged: bank lending, Canada, financial crisis, house prices, housing, housing market, loan-to-value ratio, mortgages, OECD, oil prices, trade, U.S. | 2 Comments »
Posted on November 12, 2014 by iMFdirect
By Olivier Blanchard, Luc Laeven and Esteban Vesperoni
The global crisis—which challenged paradigms about the functioning of financial markets and had significant consequences in other markets—and the sluggish recovery since 2009, are a reminder of the importance of understanding interconnections and risks in the global economy. The increasing trend in global trade, and even more significant, in cross-border financial activities, suggests that spillovers can take many different forms.
The understanding of transmission channels of spillovers has become essential, not only from an academic perspective, but also policymaking. The challenges faced by policy coordination after the initial response to the crisis in 2009—illustrated by the debate on the impact of unconventional monetary policy in emerging economies—raise wide ranging issues on fiscal, monetary, and financial policies.
Filed under: Advanced Economies, Economic Crisis, Economic research, Emerging Markets, Europe, Financial Crisis, Fiscal policy, Globalization, IMF, Politics | Tagged: capital flows, central banks, European Central Bank, exchange rate, Jacques Polak Annual Research Conference, Olivier Blanchard, sovereign debt, spillovers, surveillance, trade, U.S. monetary policy, unconventional monetary policy | Leave a comment »
Posted on July 22, 2014 by iMFdirect
By John Bluedorn and Shengzu Wang
Since the financial crisis, the euro area current account, made up mostly of the trade balances of the individual countries, has moved from rough balance into a clear surplus. But the underlying rebalancing across economies within the euro area has been highly asymmetric, with some debtors, like Greece, Ireland, and Spain, seeing large current account improvements (sometimes into surplus), while creditors, like Germany and the Netherlands, have basically maintained their surpluses (Chart 1). A set of new staff papers look at the drivers of the improvements in debtor current accounts and the persistence of creditor current accounts, and whether these developments are a cause for concern.
Filed under: Advanced Economies, Economic Crisis, Employment, Europe, Financial Crisis, IMF, International Monetary Fund, Investment, Reform | Tagged: competitiveness, economic rebalancing, employment, euro area, Germany, Greece, inflation, Ireland, labor cost, lowflation, Netherlands, Spain, trade | Leave a comment »
Posted on June 26, 2014 by iMFdirect
By Evridiki Tsounta and Kalpana Kochhar
(Versions in Español)
Emerging market economies have been experiencing strong growth, with annual growth for the period 2000-12 averaging 4¾ percent per year—a full percentage point higher than in the previous two decades. In the last two to three years, however, growth in most emerging markets has been cooling off, in some cases quite rapidly.
Is the recent slowdown just a hiccup or a sign of a more chronic condition? To answer this question, we first looked at the factors behind this strong growth performance.
Our new study finds that increases in employment and the accumulation of capital, such as buildings and machinery, continue to be the main drivers of growth in emerging markets. Together they explain 3 percentage points of annual GDP growth in 2000–12, while improvements in the efficiency of the inputs of production—which economists call “total factor productivity”—explain 1 ¾ percentage points (Figure 1).
Filed under: Economic Crisis, Economic outlook, Economic research, Emerging Markets, Employment, growth, International Monetary Fund, Latin America, Middle East | Tagged: balance sheets, commodiity prices, emerging market, employment, investment, structural reforms, trade | Leave a comment »