Enhancing Monetary Policy Flexibility Through `De-dollarization’

By Marcello Estevão and Greetje Everaert

Version in Español (Spanish)

Borrowing and saving in foreign currencies—so-called dollarization—seem like a rational response by citizens in some emerging market economies to financial crises and runaway inflation. But dollarization usually persists many years after the problems that triggered it are alleviated and limits the effect that central banks can have on economic activity and inflation. Continue reading

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

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

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

A Spanner in the Works: An Update to the World Economic Outlook

21970901656_57e69fe1e3_zBy Maurice Obstfeld

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

The United Kingdom’s June 23 vote to leave the European Union adds downward pressure to the world economy at a time when growth has been slow amid an array of remaining downside risks. The first half of 2016 revealed some promising signs—for example, stronger than expected growth in the euro area and Japan, as well as a partial recovery in commodity prices that helped several emerging and developing economies. As of June 22, we were therefore prepared to upgrade our 2016-17 global growth projections slightly. But Brexit has thrown a spanner in the works.

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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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Citizenship for Sale

By iMFdirect

A suitcase filled with multiple passports? That’s not just the stuff of spy movies anymore. Increasingly, a growing number of high-net worth individuals are looking to have a passport portfolio. This has led to a proliferation of so-called citizenship-by-investment or economic citizenship programs that allow individuals from all over the world to legitimately acquire passports.

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What Happens When Banks Stop Doing Business With Some Countries

By iMFdirect

When global banks decide to withdraw from some countries and no longer do business with banks there, the global effect so far has been a gentle ripple, but if unaddressed, it may become more like a tsunami for the countries they leave.

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