Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘IMF’

Climate Change Will Bring More Frequent Natural Disasters & Weigh on Economic Growth

Posted by hkarner - 17. November 2017

by Sebastian Acevedo, and Natalija Novta, IMF Blog

November 16, 2017

As natural disasters become more frequent and intense, countries should invest in resilient infrastructure to better withstand such hazards (photo: Carlos Garcia Rawlins/Newscom).

The weather seems to be getting wilder and fiercer. From devastating hurricanes in the U.S. and the Caribbean, to raging wildfires in California and ruinous floods in India, the human and economic toll of extreme weather events is enormous.

Each time an extreme weather event causes significant loss of property and loss of life, a natural disaster is recorded. Natural disasters are a particularly important risk to small, lower income countries because they can quickly wipe out a significant portion of their GDP. For decades, the IMF has been committed to helping meet member’s post-disaster needs. Will these needs increase with climate change? In other words, will climate change bring more frequent weather-related natural disasters? Based on our analysis in Chapter 3 of the October 2017 World Economic Outlook, the answer is yes.

Forces of nature Den Rest des Beitrags lesen »

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Higher taxes can lower inequality without denting economic growth

Posted by hkarner - 21. Oktober 2017

Date: 20-10-2017
Source: The Economist: Buttonwood

A new study by the IMF finds no strong correlation between lower taxes and higher growth

INEQUALITY is one of the big political issues of the 21st century, with many commentators citing it as a significant factor behind the rise of populism. After all, nothing could be more indicative of the triumph of the common man than the elevation of a property billionaire to the American presidency.

A new IMF report* looks at how fiscal policy can help tackle inequality. In advanced economies, taxation already has an impact. The Gini coefficient (a standard measure of income inequality) is around a third lower after taxes and transfers than it is before them. But whereas such policies offset around 60% of the change in market inequality between 1985 and 1995, they have had barely any impact since.

That is because of a change in policy direction. Across the West, taxes on higher incomes have generally fallen. This could be for a number of reasons, the IMF says. The tax take from high earners could have become more “elastic” (ie, sensitive to rate changes); in a mobile world, the elite will move countries to reduce their tax bills. But there is no sign that elasticity has increased in recent decades. A second possibility, easily dismissed, is that the share of income taken by the rich might have fallen; it has, of course, increased. A third option is that society reached a consensus that tax rates needed to be cut to help the rich. In fact, surveys show that people are more in favour of redistributive policies than they were in the 1980s. Den Rest des Beitrags lesen »

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IMF Identifies Nine Big Banks Likely to Struggle With Profitability

Posted by hkarner - 13. Oktober 2017

Date: 12-10-2017
Source: The Wall Street Journal

Projects Deutsche Bank, Citi, Barclays and others could deliver subpar profits by 2019

The International Monetary Fund said some of the world’s largest financial institutions—including Deutsche Bank AG, Citigroup Inc., Barclays PLC and a few Japanese institutions—could struggle in coming years to remain sufficiently profitable.

“About a third of banks by assets may struggle to achieve sustainable profitability, underscoring ongoing challenges and medium-term vulnerabilities,” the IMF said, referring to the world’s most important financial institutions.

The IMF’s critique of the banks came in its biannual Global Financial Stability Report, released Wednesday as finance ministers and central bankers from 189 countries gather in Washington for the annual meetings of the IMF and the World Bank. Den Rest des Beitrags lesen »

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Inequality: Tools from the Old Masters to Help Today’s Policymakers

Posted by hkarner - 5. Oktober 2017

October 3, 2017

Unemployed day laborers in South Africa: the country has relatively high income, but also high inequality (photo: Rogan Ward/Newscom).

With inequality rising in many countries, policymakers need to choose the best fiscal policies that will help share the benefits of economic growth, and in so doing, make it more inclusive.

The early 20th century English economist Arthur Pigou, among others, saw economic welfare as influenced by both “the size of the national dividend” and “the way in which it is distributed among the members of the community.”

Fortunately, economists since then have developed tools that realized Pigou’s vision by combining a country’s total income and its distribution in a single measure of economic welfare. For example, Anthony Atkinson in the 1970s developed an easy-to-interpret measure expressed in a country’s currency, just like income.

Such tools are well known in academia but underutilized in policymaking. To encourage their greater use by policymakers, our new paper provides a refresher.

Considering inequality in measurement of economic welfare Den Rest des Beitrags lesen »

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Structural Reforms Give Biggest Help To Lagging Countries

Posted by hkarner - 23. September 2017

September 22, 2017

Structural reforms can jumpstart productivity in countries with weaker initial productivity, and help them catch up with their peers 

Labor and product market reforms, which make economies more efficient, can benefit all countries. But they are especially helpful in jumpstarting productivity in countries where productivity is weaker. This is good news as it implies that reforms are one route through which countries with lower per capita incomes can catch up with richer countries instead of persistently lagging behind: economic hardship is not destiny. Our new paper provides fresh arguments in favor of the often-difficult structural reforms.

Structural reforms—the retooling of the regulations and structures that govern a country’s economy—remain politically and socially difficult to implement in many countries, because transitioning to the new regime may create winners and losers from adjustment. This is universally true, including in the euro area. Our study looks into which countries gain most from structural reforms and why, thereby once again making the case for such reforms, despite their associated costs.

The least efficient gain the most Den Rest des Beitrags lesen »

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The Risk of a New Economic Non-Order

Posted by hkarner - 20. September 2017

Mohamed A. El-Erian, Chief Economic Adviser at Allianz, the corporate parent of PIMCO where he served as CEO and co-Chief Investment Officer, was Chairman of US President Barack Obama’s Global Development Council. He previously served as CEO of the Harvard Management Company and Deputy Director at the International Monetary Fund. He was named one of Foreign Policy’s Top 100 Global Thinkers in 2009, 2010, 2011, and 2012. He is the author, most recently, of The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse.

The upcoming IMF and World Bank annual meetings offer a critical opportunity to start a serious discussion on how to arrest the lose-lose dynamics that have been gaining traction in the global economy. The longer it takes for the seeds of reform to be sown, the less likely they will be to take root.

LONDON – Next month, when finance ministers and central bank governors from more than 180 countries gather in Washington, DC, for the annual meetings of the International Monetary Fund and the World Bank, they will confront a global economic order under increasing strain. Having failed to deliver the inclusive economic prosperity of which it is capable, that order is subject to growing doubts – and mounting challenges. Barring a course correction, the risks that today’s order will yield to a world economic non-order will only intensify.  Den Rest des Beitrags lesen »

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Drifting Apart: Income Convergence in the Euro Area

Posted by hkarner - 14. September 2017

September 13, 2017

The experience of recent decades has challenged the prediction that the single currency would help differences in income levels across euro area countries narrow over time. This income convergence among the founding countries of the euro has not happened, prompting a need for further economic reforms. While newer members of the euro have converged, even this trend has stalled since the crisis.

When the 12 founding members of the euro embarked on the project of economic and monetary union, they had a clear expectation that sharing a single currency and liberalizing capital flows would boost economic growth, and help countries with lower initial income levels catch up to their richer neighbors.

Although monetary policymaking can operate effectively when income levels differ, convergence helps to ensure that the gains from economic integration are shared, and thus bolster the cohesion of the monetary union.

Great expectations of convergence Den Rest des Beitrags lesen »

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End of the Oil Age: Not Whether But When

Posted by hkarner - 13. September 2017

By Reda Cherif, Fuad Hasanov, and Aasim M. Husain, IMF Blog

Filling up at a gas station in California: demand for oil could plummet with the rise of renewal energy (Xinhua/Newscom)

A transportation revolution is underway that could completely transform the oil market in the coming decades.

When oil prices suddenly halved from over $100 a barrel in 2014, our IMF study concluded that supply-side factors such as the emergence of shale and new technologies would be a key force keeping oil prices “lower for longer.” More recent studies suggest that other new technologies, such as the spread of electric cars and solar electricity generation, could even more profoundly affect the oil market and the long-term demand for oil. As Sheikh Zaki Yamani, a former Saudi oil minister, once said, “The stone age came to an end not for a lack of stones, and the oil age will end, but not for a lack of oil.” Den Rest des Beitrags lesen »

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Saving the International Economic Order

Posted by hkarner - 3. September 2017

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More Action Needed on European Bank Profitability

Posted by hkarner - 31. August 2017

August 30, 2017

European banking has made considerable progress in the past few years: Banks have built up capital, regulation is stronger and supervision has been enhanced. But profitability remains weak, posing risks for financial stability.

In a sample of more than 170 large European lenders with combined assets of $35 trillion, roughly half generated a weak return on equity in 2016, and banks representing only 15 percent of assets generated a healthy return on equity, defined as more than 10 percent. Weak profitability is also shown in a low return on assets for domestic banks in many European countries. The drivers of these weak returns reflect varying combinations of low income, high costs, or provisions needed to build buffers against non-performing assets.

Impact on stability Den Rest des Beitrags lesen »

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