The Euro Area Workforce is Aging, Costing Growth

Posted on August 17, 2016 by iMFdirect

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 →

Filed under: Advanced Economies, aging, Employment, euro zone, Europe, growth, health, IMF, International Monetary Fund, labor force | Tagged: , , , , , , , , , , , , , , , | Leave a comment »

Sluggish Business Investment in the Euro Area: The Roles of Small and Medium Enterprises and Debt

Posted on August 4, 2016 by iMFdirect

By John C. Bluedorn and Christian Ebeke

Small businesses could be the lifeblood of Europe’s economy, but their size and high debt are two of the factors holding back the investment recovery in the euro area. The solution partly lies in policies to help firms grow and reduce debt.

Our new study, part of the IMF’s annual economic health check of the euro area, takes a novel bottom-up look at the problem. We analyze the drivers of investment using a large dataset of over six million observations in eight euro area countries, from 2003 to 2013: Austria, Belgium, Germany, France, Finland, Italy, Portugal, and Spain. Continue reading →

Filed under: banking, Economic research, euro zone, Europe, Finance, Financial Crisis, IMF, International Monetary Fund, Investment, Public debt | Tagged: , , , , , , , , , , , , , , , , , , , | Leave a comment »

Unemployment: Troubles Ahead for Emerging Markets

Posted on May 3, 2016 by iMFdirect

By Prakash Loungani and Zidong An

Version in Español (Spanish)

Forecasts of real GDP growth attract a lot of media attention. But what matters more to the person on the street is how growth translates into jobs. Unfortunately, the mediocre growth outlook of recent years may lead to a disturbing outlook for jobs, particularly among fuel-exporting countries and in the Latin America and Caribbean region.

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Filed under: Advanced Economies, Caribbean, developing countries, Emerging Markets, euro zone, Inequality, International Monetary Fund, Latin America, U.S., unemployment | Tagged: , , , , , , , , , , , , , , | Leave a comment »

Warning Signs as Global Financial Risks Increase

Posted on April 13, 2016 by iMFdirect

GFSRBy José Viñals

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

 

Over the last six months, global financial stability risks increased as a result of the following developments:

  • First, macroeconomic risks have risen, reflecting a weaker and more uncertain outlook for growth and inflation, and more subdued sentiment. These risks were highlighted yesterday at the World Economic Outlook press conference.
  • Second, falling commodity prices and concerns about China’s economy have put pressure on emerging markets and advanced economy credit markets.
  • Finally, confidence in policy traction has slipped, amid concerns about the ability of overburdened monetary policies to offset the impact of higher economic and political risks.

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Filed under: Advanced Economies, banking, euro zone, Europe, Finance, Financial markets, IMF, International Monetary Fund, oil, U.S. | Tagged: , , , , , , , , , , , , | Leave a comment »

Reviving Credit in the Euro Area

Posted on November 23, 2015 by iMFdirect

by Jean Portier and Luca Sanfilippo

A stock in excess of €900 billion of nonperforming loans continue to clutter the European banking system, impeding economic growth. This issue remains a key challenge for policy makers. As we show in our latest Global Financial Stability Report, part of the solution to address this legacy is an upgrade in legal systems. Current inefficiencies—long foreclosure times and insolvency procedures—are a reason for the gap between the value of loans on bank balance sheets and the price investors are willing to pay. A reliable legal environment and an efficient judicial system maximize the value of nonperforming loans (NPLs), reduce the value gap and give banks greater incentive to get NPLs off the books. Our analysis, using time to foreclose as a proxy for effective insolvency regimes, shows there is a large upside for new lending capacity in the euro area (Chart 1).

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Filed under: Advanced Economies, Europe, IMF, International Monetary Fund | Tagged: , , , , , , , , | 1 Comment »

The Effects of Wage Moderation: Can Internal Devaluations Work?

Posted on November 17, 2015 by iMFdirect

By Jorg Decressin and Prakash Loungani

Devaluation is often part of the remedy for a country in financial trouble. Devaluation boosts the competitiveness of a country’s exports and curtails imports by making them more costly. Together, the higher exports and the reduced imports generate some of the financial resources needed to help the country get out of trouble.

For countries that belong to—and want to stay in—a currency union, however, devaluation is not an option. This was the situation facing several euro area economies at the onset of the global financial crisis: capital had been flowing into these countries before the crisis but much of it fled when the crisis hit.

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Filed under: Advanced Economies, Economic outlook, Economic research, Emerging Markets, Employment, Europe, Financial Crisis, Fiscal policy, growth, IMF, Inequality, International Monetary Fund | Tagged: , , , , , | Leave a comment »

Global Financial Stability: Vulnerabilities, Legacies, and Policy Challenges

Posted on October 7, 2015 by iMFdirect

GFSRBy José Viñals

(Versions in 中文, Français, Русский, and Español)

Today global financial stability is not yet assured and downside risks prevail. Our recommendation is for an urgent upgrade in policies, to avoid downside risks and to achieve our upside scenario of “successful normalization” of monetary and financial conditions. This will secure financial stability and strengthen the economic recovery.

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Filed under: Advanced Economies, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Financial Crisis, Fiscal policy, growth, IMF, International Monetary Fund, Public debt | Tagged: , , , , , , , , , | Leave a comment »

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