The Evidence that Growth Creates Jobs: A New Look at an Old Relationship


By iMFdirect

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

The link between jobs and economic growth is not always a straight line for countries, but that doesn’t mean it’s broken.

Economists track the relationship between jobs and growth using Okun’s Law, which says that higher growth leads to lower unemployment.

New research from the IMF looks at Okun’s Law and asks, based on the evidence, will growth create jobs? The findings show a striking variation across countries in how employment responds to GDP growth over the course of a year. Continue reading

A Sea Change: The New Migration from sub-Saharan Africa


By Jesus Gonzalez-Garcia and Montfort Mlachila

Versions in Français (French), and Português (Portuguese)

Migration of sub-Saharan Africans is growing rapidly. Just like the region’s population, the number of migrants doubled since 1990 to reach about 20 million in 2013. In the coming decades, migration will expand given the demographic boom in the working-age population—the group that typically feeds migration. We studied these trends in a recent paper because both receiving and sending countries need the right policies so all can benefit.

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Strengthening Canada’s Economic Toolkit: Improving the Inflation Targeting Framework


By Maurice Obstfeld, Douglas Laxton, Yulia Ustyugova, and Hou Wang

For the past 25 years, Canada’s monetary policy framework has been working well. Headline inflation averaged 1.9 percent, 1994–2015, and long-term inflation expectations have been very well anchored to the 2 percent target (Chart 1).

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A “New Normal” for the Oil Market


By Rabah Arezki and Akito Matsumoto

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

While oil prices have stabilized somewhat in recent months, there are good reasons to believe they won’t return to the high levels that preceded their historic collapse two years ago. For one thing, shale oil production has permanently added to supply at lower prices. For another, demand will be curtailed by slower growth in emerging markets and global efforts to cut down on carbon emissions. It all adds up to a “new normal” for oil.

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Migrants Bring Economic Benefits for Advanced Economies


By Florence Jaumotte, Ksenia Koloskova, and Sweta Saxena

Version in Español (Spanish)

Migration, no matter how controversial politically, makes sense economically. A new IMF study shows that, over the longer term, both high- and low-skilled workers who migrate bring benefits to their new home countries by increasing income per person and living standards. High-skilled migrants bring diverse talent and expertise, while low-skilled migrants fill essential occupations for which natives are in short supply and allow natives to be employed at higher-skilled jobs. Moreover, the gains are broadly shared by the population. It may therefore be well-worth shouldering the short-term costs to help integrate these new workers.

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Big Bad Actors: A Global View of Debt


By Vitor Gaspar and Marialuz Moreno Badia

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

In the midst of the Great Depression, the American economist Irving Fisher warned of the dangers of excessive debt and the deflationary pressures that follow on its tail. He saw debt and deflation as the big, bad actors. Now, their close relatives—too high debt and too low inflation—are still in play, at least for advanced economies.

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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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