The World Economy: Moving Sideways

maury-obstfeld-weo_220x150By Maurice Obstfeld

Versions in: عربي (Arabic), 中文 (Chinese), Français (French), 日本語 (Japanese), Русский (Russian), and Español (Spanish)

A return to the strong, sustainable, balanced, and inclusive growth that Group of Twenty leaders called for at Hangzhou in September still eludes us. Global growth remains weak, even though it shows no noticeable deceleration over the last quarter. The new World Economic Outlook sees a slowdown for the group of advanced economies in 2016 and an offsetting pickup for emerging and developing economies. Taken as a whole, the world economy has moved sideways. Without determined policy action to support economic activity over the short and longer terms, sub-par growth at recent levels risks perpetuating itself—through the negative economic and political forces it is unleashing.

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A Tale of Two Tellers

Jeff Hayden

by Jeff Hayden

My mother eases her car into the drive-through lane at our local bank, signs the back of her check, and places it in a metal canister. WHOOSH—the cylinder flies through a pneumatic tube to the teller inside the building.

In a few minutes, the teller squawks her thanks from the intercom speaker nearby. Another WHOOSH, and the canister returns. Inside we find a deposit receipt and a lollipop. Welcome to high-efficiency consumer banking, circa 1973.

Summer 2016. In our kitchen, I watch my oldest son rip open his paycheck and whip out his iPhone. TAP. SWIPE. CLICK. The deposit is made in an instant, thanks to an app that plugs him into an electronic banking network.

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Accelerating Financial Sector Development to Boost Growth in Sub-Saharan Africa

Anne-Marie Gulde-Wolf.IMFBy Anne-Marie Gulde-Wolf

Version in Français (French), Português (Portuguese)

There are many reasons why deeper financial development—the increase in deposits and loans but also their accessibility and improved financial sector efficiency—is good for sustainable growth in sub-Saharan Africa. For one, it helps mobilize savings and to direct funds into productive uses, for example by providing the start-up capital for the next innovative enterprise. This in turn facilitates a more efficient allocation of resources and increases overall productivity.

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Africa Pausing

Jeff HaydenBy Jeff Hayden

Strong performance by many African economies over the past two decades led some commentators to coin the term “Africa Rising” to describe the region’s surging economic power.

The term graced the cover of TIME magazine in December 2012, in an issue that chronicled the region’s decades-long journey from economic anemia to impressive vigor. Beginning in the mid-1990s, many—but certainly not all—countries in sub-Saharan Africa energized their economies, achieving in recent years some of the world’s highest growth. Living standards improved as a result, as did health care and other key services, inspiring hope for a bright future.

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Bang for Your Buck: Public Investment & Efficiency

by iMFdirect

Public capital—road, bridges, electricity—can make countries richer by attracting more investment and building economic growth at a time when many are struggling with low growth.  Many economists would argue public investment projects in highly efficient countries tend to have a greater impact on growth. New research by IMF economists shows that’s not necessarily the case. Continue reading

Capacity Development in Africa: the Faces behind the Numbers

By Carla Grasso CGrasso

Versions in:  عربي (Arabic),  中文 (Chinese), Français (French),  日本語 (Japanese), Português (Portuguese), Русский (Russian), and Español (Spanish)

If there’s one thing all economists can agree on, it’s the importance of numbers. Without good data, it is difficult to assess how an economy is performing and formulate smart policies that help improve lives. Continue reading

The Case for Reforming the Price of Water

David Lipton2012By David Lipton

Versions in عربي (Arabic), 中文 (Chinese), Français (French), 日本語 (Japanese), Русский (Russian), and Español (Spanish)

One of the first things most students of economics learn is the diamond and water paradox. How can it be that water is free even though life cannot exist without it, while diamonds are expensive although no one dies for lack of diamonds?

The answer is that water can be free if its supply is abundant relative to demand. Nevertheless, it is abundantly clear that worldwide, the demand for water outpaces supply. This imbalance is the clearest sign that water is underpriced. Yet, many governments are reluctant to price water like other goods.

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