Dealing with Sovereign Debt—The IMF Perspective


By Sean Hagan, Maurice Obstfeld, and Poul M. Thomsen

Version in Español (Spanish)

Debt is central to the functioning of a modern economy. Firms can use it to finance investments in future productivity. Households can use it to finance lumpy purchases, such as big consumer durables, or a home. Sometimes, however, firms’ investments do not pan out or a household’s main earner loses his or her job. Countries’ legal systems generally recognize that in these cases, debtors and creditors alike—along with society at large—may be better off if there is an orderly procedure for reorganizing debts.  Continue reading

The IMF’s Work on Inequality: Bridging Research and Reality


By Prakash Loungani and Jonathan D. Ostry

Over the past three decades, income inequality has gone up in most advanced economies and in many developing ones as well. Why? Much of the research on inequality has focused on advances in technology and liberalization of trade as the main drivers. While technology and trade are global trends that are difficult to resist, IMF studies have shown that the design of government policies matters and can help limit increases in inequality. Continue reading

Islamic Banking Proposals Get IMF Approval


By Ghiath Shabsigh, Ross Leckow, and Zeine Zeidane

Versions in:  ArabicFrenchIndonesian, and Malay

Islamic banking, a small but fast-growing corner of the financial world, is receiving greater attention from regulators and policy makers. The IMF recently adopted a set of proposals on Islamic banking and called for a more comprehensive set of policies to ensure financial stability in countries with Islamic banking and support the sound development of the industry. The IMF is now calling for additional work and cooperation by its staff with other international agencies to improve the adoption of relevant standards for Islamic banking and to address remaining regulatory gaps.  Continue reading

Chart of the Week: Access to Banking Services


By iMFdirect

Version in: Français (French), and Español (Spanish)

Did you know that while many people in advanced economies have multiple bank accounts, there are barely two bank accounts for every ten people in low-income economies? Access to financial services is essential to spread the fruits of economic growth to all, not just to the fortunate few.  Continue reading

Data and Inequality


by iMFdirect

Policymakers need good data to help them make good decisions.

Ravi Kanbur says producing statistics on inequality is never just a technical act; it has political consequences.  Kanbur is a Professor of Economics at Cornell University and delivered the keynote speech at the Fourth IMF Statistical Forum on Statistics for Inclusive Growth.

Continue reading

Helping Feed the World’s Fast-Growing Population


rabah-arezki-imfBy Rabah Arezki

Agriculture and food markets are plagued with inefficiencies that have dramatic consequences for the welfare of the world’s most vulnerable populations. Globally, farm subsidies amount to over $560 billion a year—equivalent to nearly four times the aid given to developing countries by richer ones. Major emerging-market nations have increased subsidies rapidly, even as rich nations cut theirs drastically. Meanwhile, tariffs on farm products remain a major point of contention in global trade talks.

One third of global food production goes to waste, while food insecurity is still rampant in developing countries. Even with the explosion of agricultural productivity since the middle of the 20th century, food security remains a challenge for much of the developing world. Food-calorie production will have to expand by 70 percent by 2050 to keep up with a global population that’s forecast to grow to 9.7 billion from last year’s 7.3 billion. Food insecurity can lead to violence and conflicts that can spill over well beyond borders.  Continue reading

The Fruits of Growth: Economic Reforms and Lower Inequality


Lagarde.2015MDPORTRAIT4_114x128By Christine Lagarde

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

Growth is essential for improving the lives of people in low-income countries, and it should benefit all parts of society.

Traveling through Africa in the last few days, I have been amazed by the vitality I have witnessed: business startups investing in the future, new infrastructure under construction, and a growing middle class. Many Africans are now making a better living and fewer are suffering from poverty. My current host, Uganda, for example, has more than halved its absolute poverty rate to about 35 percent from close to 90 percent in 1990.

But we have also seen a flip side. Poverty, of course, but inequality as well remain stubbornly high in most developing countries, including in Africa, and too often success is not shared by all.  Continue reading

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