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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No Victory Lap Yet: U.S. Wage Growth Elusive

stephan-danningerBy Stephan Danninger

The U.S. labor market seems to have finally healed. The unemployment rate has been below 5 percent for some time and job growth is steady. And more Americans are coming back to the labor market—in other words, labor participation is increasing. Yet, despite a bump-up in 2015, wage growth so far this year—compared to the 2000s—is still disappointingly low (see Chart 1). This is worrying because consumer spending, which makes up the majority of U.S. economic output, cannot continue at the current pace unless wages grow.  Continue reading

Robots, Growth & Inequality

by iMFdirect

Are robots taking over the world economy? Life imitates art, and as robotic technology becomes more sophisticated, robots could soon become perfect substitutes for human labor.

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China’s Rebalancing Explained in 6 Charts

By Longmei Zhang

Version in 中文 (Chinese)

The word “rebalancing” is often used to describe China’s economic transition. But what does it mean? And how much is China rebalancing? A recent IMF paper attempts to answer these questions.  Continue reading

The Euro Area Workforce is Aging, Costing Growth

By Shekhar Aiyar, Christian Ebeke, and Xiaobo Shao

Versions in Français (French), and Español (Spanish)

In parallel to the aging of the general population, the workforce in the euro area is also growing older. This could cause productivity growth to decline in the years ahead, raising another policy challenge for governments already dealing with legacies from the crisis such as high unemployment and debt.  Continue reading

Emigration Slows Eastern Europe’s Catch Up With the West

By Nadeem Ilahi, Anna Ilyina, and Daria Zakharova

(Versions in: Bulgarian, Czech, Estonian, Hungarian, Latvian, Lithuanian, Polish, Romanian, Russian, Serbian, and Slovenian)

The opening up of Eastern Europe to the rest of the world in the early 1990s brought about tremendous benefits. The inflow of capital and innovation has led to better institutions, better economic management, and higher efficiency. On the flip side, it has also led to sizable and persistent outflow of people.

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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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