Föhrenbergkreis Finanzwirtschaft

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Posts Tagged ‘IMF’

Europe’s Wage-Price Puzzle

Posted by hkarner - 12. November 2019

By Richard Varghese

Does higher wage growth fuel inflation? In Europe, that has historically been the case. But the link between wage growth and inflation has weakened in recent years amid low inflation expectations, robust corporate profitability, and strong competitive pressures.

The price of labor—namely wages—is rising at a robust pace, especially in the European Union’s newer member states. Yet, surprisingly, inflation has barely risen. We set out to shed light on this puzzle in Chapter 2 of the Regional Economic Outlook: Europe.

It is likely that robust wage growth will not meaningfully spur inflation in the near future.

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A Map of Inequality in Countries

Posted by hkarner - 7. November 2019

By William Gbohoui, Raphael Lam, and Victor Lledo

Social and economic inequality between and within regions in countries is rising in many advanced economies and is now at the forefront of the policy debate because of perceptions that some people and places have been left behind. Changes in global trade and technology have shifted jobs and industries on the map, but the economic gains within countries are not well shared.

One might think the solution is for people to move in search of better jobs and lives. But people find it harder to move to booming cities with more jobs like Washington D.C., San Francisco or London in part because they can’t afford to live there, or because they do not have the right skills required for higher-paying jobs.

Our recent paper studies regional inequality in 20 advanced economies, including the United States, Canada, Italy and Germany. We find that regional disparities in income are large, persistent, and increasing over time. Den Rest des Beitrags lesen »

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The Monetarist Era is Over

Posted by hkarner - 1. November 2019

Anatole Kaletsky is Chief Economist and Co-Chairman of Gavekal Dragonomics. A former columnist at the Times of London, the International New York Times and the Financial Times, he is the author of Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis, which anticipated many of the post-crisis transformations of the global economy. His 1985 book, Costs of Default, became an influential primer for Latin American and Asian governments negotiating debt defaults and restructurings with banks and the IMF.

Central bankers have been the first to recognize that the effectiveness of monetary policy in managing demand and stabilizing economic cycles has reached its limits. The problem is that many politicians and academic economists remain in denial.

LONDON – A mood of foreboding dominated this month’s annual meetings of the International Monetary Fund and World Bank in Washington, DC. But fear of a global recession was not the real cause. Although the latest update of the IMF’s World Economic Outlook showed economic activity slowing this year to its weakest level since 2009, the projected global growth rate of 3% is still far above levels associated with past recessions and would be consistent with decent economic conditions in most parts of the world – not a bad outcome for the 11th year of a sustained global expansion. And for next year, the IMF predicts that growth will accelerate to 3.4%, very close to the 3.6% estimate of the world economy’s long-run sustainable trend.

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The Global Informal Economy: Large but On The Decline

Posted by hkarner - 31. Oktober 2019

By Thomas F. Alexander

The informal economy, which is economic activity that falls outside the regulated economy and tax system, such as street vending or unregistered taxi drivers, is hard to measure.

People and companies engaged in the informal economy usually operate on a small scale. This means there are no official statistics on the informal or shadow economy, as it’s sometimes called, so economists need to estimate its size. Some common techniques include surveys or indirect indicators such as the demand for currency.

The size of the informal economy—measured as a share of GDP—has fallen gradually across all regions.

Our chart of the week, based on an updated version of earlier IMF research, shows that the size of the informal economy—measured as a share of GDP—has fallen gradually across all regions. While reforms to reduce informality, such as reducing the hurdles to registering a business, are working, the shift from informal to formal takes time. Den Rest des Beitrags lesen »

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Handelskrieg nur Auslöser: Ursache der Rezession ist verfehlte Geldpolitik der Notenbanken

Posted by hkarner - 29. Oktober 2019

Dank an J.G.

DWN, 25/10

Trumps Handelskrieg ist nur der Auslöser der sich anbahnen-den Rezession. Doch die Ursachen liegen tiefer: In der verfehlten Geldpolitik der großen Notenbanken.

Trumps Handelskrieg hat eine globale Wachstumsverlangsamung mit Rezessionsgefahr ausgelöst. Doch die Ursachen der aktuellen Wirtschaftsverlangsamung gehen tiefer. Man kann nicht alles der Trump-Administration oder – innerhalb Europas – dem Brexit anlasten. Es ist viel-mehr die gesamte Politik der letzten Dekaden, welche ein inkohärentes, un-sicheres Gebäude der Weltwirtschaft errichtet hat.

Ein wichtiger Punkt ist die schlechte Qualität des konjunkturellen Aufschwungs seit der Grossen Finanzkrise, eigentlich sogar schon seit der Jahrtausendwende. Die Durchsetzung des sogenannten Freihandels mit China (WTO-Beitritt Dezember 2011) und die Integration der osteuropäi-schen Länder in die Europäische Union waren zunächst primär eine Arbitrage-Gelegenheit vor allem für westliche Großunternehmen und Multinationale, um Löhne, Steuern, Sozialleistungen und Umweltkosten zu sparen beziehungsweise zu drücken. Der Freihandel erfolgte nur in eine Richtung: China schottete seinen Binnenmarkt weiterhin sorgsam ab, wo die Führung dies wollte: Über prohibitive Zölle, und über den Zwang zu joint ventures für ausländische, in China produzierende Unternehmen. Profitiert haben neben diesen Konzernen zum einen China und dessen Zulieferer-Staaten in Asien, zum anderen die Länder Osteuropas. In den Vereinigten Staaten und in Westeuropa ist die Industrie stark geschrumpft – Ausnahme das Auto- und Maschinenbauerland Deutschland sowie einige kleine Länder mit ähnlichen Eigenschaften. Ein wesentlicher Grund ist auch, dass in den USA und in Europa seit Jahrzehnten zu wenig, teilweise viel zu wenig, in die Infrastruktur investiert wird. Kein Wunder ist das Wirtschaftswachstum der letzten beiden Dekaden in vielen Industrieländern von einer schwachen Investitionstätigkeit begleitet, nota-bene trotz der nominell und real niedrigsten Zinsen seit dem Zweiten Weltkrieg. Den Rest des Beitrags lesen »

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World economy is sleepwalking into a new financial crisis, warns Mervyn King

Posted by hkarner - 22. Oktober 2019

Date: 21-10-2019
Source: The Guardian Larry Elliott in Washington

Past crashes spawned new thinking and reform but nothing has changed since 2008 banking meltdown, says former Bank of England boss

Lord King said resistance to new thinking meant a repeat of the financial chaos of the 2008-09 period was looming.

The world is sleepwalking towards a fresh economic and financial crisis that will have devastating consequences for the democratic market system, according to the former Bank of England governor Mervyn King.

Lord King, who was in charge at Threadneedle Street during the near-death of the global banking system and deep economic slump a decade ago, said the resistance to new thinking meant a repeat of the chaos of the 2008-09 period was looming. Den Rest des Beitrags lesen »

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Lower for Longer: Rising Vulnerabilities May Put Growth at Risk

Posted by hkarner - 17. Oktober 2019

By Tobias Adrian and Fabio Natalucci

The pace of global economic activity remains weak, and financial markets expect rates to stay lower for longer than anticipated in early 2019. Financial conditions have eased even more, helping contain downside risks and support the global economy in the near term. But loose financial conditions come at a cost: they encourage investors to take more chances in a quest for higher returns, so risks to financial stability and growth remain high in the medium term.

The latest edition of our Global Financial Stability Report highlights elevated vulnerabilities in the corporate and non-bank financial sectors in several large economies. These and other weak spots could amplify the impact of a shock, such as an intensification of trade t ensions or a no-deal Brexit, posing a threat to economic growth. Den Rest des Beitrags lesen »

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The World Economy: Synchronized Slowdown, Precarious Outlook

Posted by hkarner - 16. Oktober 2019

October 15, 2019, IMF Blog

By Gita Gopinath

The global economy is in a synchronized slowdown and we are, once again, downgrading growth for 2019 to 3 percent, its slowest pace since the global financial crisis. Growth continues to be weakened by rising trade barriers and increasing geopolitical tensions. We estimate that the US-China trade tensions will cumulatively reduce the level of global GDP by 0.8 percent by 2020. Growth is also being weighed down by country-specific factors in several emerging market economies, and by structural forces, such as low productivity growth and aging demographics in advanced economies.

In the October World Economic Outlook, we are projecting a modest improvement in global growth to 3.4 percent in 2020, another downward revision of 0.2 percent from our April projections. However, unlike the synchronized slowdown, this recovery is not broad-based and remains precarious. Den Rest des Beitrags lesen »

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Connecting the Dots Between Sustainable Finance and Financial Stability

Posted by hkarner - 11. Oktober 2019

Evan Papageorgiou, Jochen Schmittmann, and Felix Suntheim

Unsafe working conditions. Use of child or forced labor. Environmental impact on protected areas. More and more investors are looking at issues and factors beyond traditional financial analysis when directing their money. Sustainable finance aims to help society better meet today’s needs and ensure that future generations will be able to meet theirs too.

The latest IMF Global Financial Stability Report discusses the link between sustainable finance and financial stability and suggests policies for the way forward.

Sustainable finance incorporates environmental, social, and governance (ESG) principles into business decisions and investment strategies. It covers many issues from climate change and pollution to labor practices, consumer privacy, and corporate competitive behavior. Efforts to incorporate these kinds of considerations in finance started 30 years ago but accelerated only in recent years.

Environmental, social, and governance issues can have a material impact on firms’ performance.

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Fiscal Policies to Curb Climate Change

Posted by hkarner - 11. Oktober 2019

By Vitor Gaspar, Paolo Mauro, Ian Parry, and Catherine Pattillo

Global warming has become a clear and present threat. Actions and commitments to date have fallen short. The longer we wait, the greater the loss of life and damage to the world economy. Finance ministers must play a central role to champion and implement fiscal policies to curb climate change. To do so, they should reshape the tax system and fiscal policies to discourage carbon emissions from coal and other polluting fossil fuels.

The Fiscal Monitor helps policymakers choose what to do and how to do it, right now, globally and at home.

A better future is possible. Governments will need to increase the price of carbon emissions to give people and firms incentives to reduce energy use and shift to clean energy sources. Carbon taxes are the most powerful and efficient tools, but only if they are implemented in a fair and growth-friendly way. Den Rest des Beitrags lesen »

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