Posted on September 10, 2015 by iMFdirect
By Joong Shik Kang and Shi Piao
(version in 日本語)
Japanese-brand cars have become everyday, household items in the United States, and it’s hard to drive in the country without seeing one on the roads. These cars may be manufactured by Japanese firms, but about 70 percent of these vehicles are actually produced in North America. Globally, in 2014, about two-thirds of Japanese cars were produced on assembly lines outside of that country. Despite the increase in overseas demand for Japanese vehicles, this hasn’t been mirrored by an expansion in investment, and the building of factories in Japan to meet that demand.
Against this background, our IMF Working Paper looks at possible reasons for this sluggish recovery of corporate investment in Japan, focusing on the role of Japanese firms overseas.
Filed under: Advanced Economies, Asia, Economic Crisis, Economic research, Financial Crisis, growth, IMF, International Monetary Fund, Investment, Reform, 日本語 | Tagged: Abenomics, Bank of Japan, energy, investment, Japan, labor force, manufacturing, structural reform | Leave a comment »
Posted on August 24, 2015 by iMFdirect
By Giovanni Ganelli and Naoko Miake
(Version in 日本語)
Take a walk in Tokyo, and you will see the sign スタッフ募集中, or “Staff Wanted”, outside many restaurants and convenience stores. These businesses often find it impossible to recruit the workers they need. According to recent statistics, for each job seeker in Japan applying to work as a waiter, there are more than three available positions. Home helpers and long-term caregivers are equally in demand. If you want to work as a security guard, you can choose from around five openings, and for some positions in the construction business the job-to-applicant ratio is over six.
Japan’s labor shortages are the result of both a shrinking population—which limits the overall pool of workers—and skill mismatches. The reduced supply of labor is one of the factors bringing down medium-term potential growth, which the International Monetary Fund estimates at just 0.6 percent. Labor market shortages are also bad for short-term growth, because they reduce the effectiveness of the monetary and fiscal stimulus that the authorities are using to try to boost demand.
Filed under: Advanced Economies, Asia, Economic outlook, Economic research, Emerging Markets, Employment, Fiscal policy, growth, IMF, Inequality, International Monetary Fund, Investment, Reform, unemployment | Tagged: Abenomics, female labor participation, immigration, investment, Japan, jobs, labor market, women | Leave a comment »
Posted on July 22, 2015 by iMFdirect
By Andre Meier and Fabiano Rodrigues Bastos
(Versions in Español and Português)
Latin America’s recent economic fortunes highlight the region’s closer economic ties with Asia. China, in particular, has grown into a crucial source of demand for Latin American commodities over the past two decades, providing significant gains to the region. The flip side is that the ongoing structural slowdown of Chinese investment is weighing considerably on the prices of those commodities, and the countries that export them.
But Asia can be much more than just a source of episodic windfall gains (and losses) for Latin America. Like a windmill, Asia could help to power a stronger Latin American economy—by providing an example of successful regional trade integration and through greater direct links across the Pacific that benefit both sides. However, securing these benefits will require clear and realistic objectives, a long-term strategy, and attention to the political and social implications of greater economic integration.
Filed under: Advanced Economies, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Finance, Financial Crisis, Fiscal policy, Globalization, growth, IMF, International Monetary Fund, Investment, Latin America | Tagged: Asia, Brazil, Caribbean, Chile, China, foreign direct investment, India, international trade, investment, Japan, Korea, Latin America, Mexico, Peru, trade | Leave a comment »
Posted on July 20, 2015 by iMFdirect
By David Lipton
Why have businesses in advanced economies not been investing more in machinery, equipment and plants? Business investment is the largest component of private investment, and its weakness has puzzled many of us.
Some believe that the key to more business investment is less uncertainty about fiscal policy, regulation, and structural reforms. Some believe that it is providing better financing, including for small and medium-sized enterprises (SMEs).
Filed under: Advanced Economies, Economic outlook, Economic research, Emerging Markets, Fiscal policy, growth, IMF, International Monetary Fund, Investment, Public debt | Tagged: David Lipton, fiscal policy, infrastructure, investment, monetary policy, public investment, recession, World Economic Outlook | Leave a comment »
Posted on July 1, 2015 by iMFdirect
By Stefan Laseen, Andrea Pescatori, and Jarkko Turunen
Academics and policy-makers alike have long struggled with the question of whether to use monetary policy to dampen asset price booms – whether to “lean against the wind” or not. Can officials identify emerging asset price bubbles, what are the implications of bursting them, and is monetary policy the appropriate response to potential bubbles? These questions have become even more important to the policy debate in the wake of the global financial crisis, which was preceded by an unsustainable boom in sub-prime mortgage lending and housing prices.
Given over six years of near zero policy interest rates, should the U.S. Fed now use interest rates to lean against potential financial stability risks that may have built up?
Filed under: Advanced Economies, Economic outlook, Economic research, Employment, Finance, Financial Crisis, Fiscal policy, Government, growth, IMF, International Monetary Fund, Investment, Multilateral Cooperation, Politics | Tagged: Federal Reserve, financial risks, financial stability, inflation, interest rates, investment, macroprudential policy, U.S., U.S. Fed, United States | Leave a comment »
Posted on June 9, 2015 by iMFdirect
By Fabiano Rodrigues Bastos and Ke Wang
(Versions in Español and Português)
Growth in Latin America and the Caribbean has weakened significantly over the last few years. Part of this weakness appears to be here to stay, and IMF economists have marked down medium-term growth projections. This story sounds eerily familiar, given the region’s past difficulties to improve its comparative growth performance.
Abstracting from the “golden decade” from 2003 to 2011, when rising commodity prices powered a strong expansion, why has the region been unable to sustain sufficiently high growth rates to catch up with more advanced economies? Part of the answer is Latin America’s modest success in branching out into more sophisticated—or complex—goods.
Filed under: Advanced Economies, Asia, Economic outlook, Economic research, Emerging Markets, Employment, Finance, Financial Crisis, Fiscal policy, Government, growth, IMF, International Monetary Fund, Latin America, Reform | Tagged: Brazil, Caribbean, commodiity prices, commodity exports, education, infrastructure, investment, Latin America, macroeconomic stability, Mexico, Regional Economic Outlook: Western Hemisphere, trade | Leave a comment »
Posted on June 5, 2015 by iMFdirect
By Alejandro Werner
(Versions in Español and Português)
Latin America has reached a critical moment. So much better off than two decades ago, and still facing deep-seated problems that get in the way of sustained strong growth and economic development. To better understand these problems from countries’ perspectives, and explore ways the IMF and others can help address them, we brought together experts from the region and beyond—central bankers, finance ministers, and academics—for a high-level conference in Washington, D.C. earlier this week.
Under the theme of “Rising Challenges to Growth and Stability,” participants engaged in lively debates about the current difficulties facing Latin America and the policy priorities for now and the future.
Here are my main takeaways from the event:
Filed under: Advanced Economies, Economic Crisis, Economic outlook, Emerging Markets, Employment, Español, Finance, Fiscal policy, Globalization, growth, IMF, International Monetary Fund, Latin America, Reform | Tagged: Annual Meetings, commodiity prices, economic development, economic diversification, education, governance, inequality, infrastructure, investment, Latin America, Peru, Regional Economic Outlook: Western Hemisphere, trade, U.S. interest rates | Leave a comment »