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Posts Tagged ‘Obstfeld’

A Shifting Global Economic Landscape: Update to the World Economic Outlook

Posted by hkarner - 17. Januar 2017

Posted on by iMFdirect

maury-obstfeld-blogsize-final2By Maurice Obstfeld

Today we released our update to the World Economic Outlook.

An accumulation of recent data suggests that the global economic landscape started to shift in the second half of 2016. Developments since last summer indicate somewhat greater growth momentum coming into the new year in a number of important economies. Our earlier projection, that world growth will pick up from last year’s lackluster pace in 2017 and 2018, therefore looks increasingly likely to be realized. At the same time, we see a wider dispersion of risks to this short-term forecast, with those risks still tilted to the downside. Uncertainty has risen. 

Our central projection is that global growth will rise to a rate of 3.4 percent in 2017 and 3.6 percent in 2018, from a 2016 rate of 3.1 percent. Much of the better growth performance we expect this year and next stems from improvements in some large emerging market and low income economies that in 2016 were exceptionally stressed. That being said, compared to our view in October, we now think that more of the lift will come from better prospects in the United States, China, Europe, and Japan. Den Rest des Beitrags lesen »

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The IMF is Not Asking Greece for More Austerity

Posted by hkarner - 14. Dezember 2016

Posted on by iMFdirectObstfeld

By Maurice Obstfeld (pictured) and Poul M. Thomsen

Greece is once again in the headlines as discussions for the second review of its European Stability Mechanism (ESM) program are gaining pace. Unfortunately, the discussions have also spurred some misinformation about the role and the views of the IMF. Above all, the IMF is being criticized for demanding more fiscal austerity, in particular for making this a condition for urgently needed debt relief. This is not true, and clarifications are in order.

The IMF is not demanding more austerity. On the contrary, when the Greek Government agreed with its European partners in the context of the ESM program to push the Greek economy to a primary fiscal surplus of 3.5 percent by 2018, we warned that this would generate a degree of austerity that could prevent the nascent recovery from taking hold. We projected that the measures in the ESM program will deliver a surplus of only 1.5 percent of GDP, and said this would be enough for us to support a program. We did not call for additional measures to achieve a higher surplus. But contrary to our advice, the Greek Government agreed with the European institutions to temporarily compress spending further if needed to ensure that the surplus would reach 3.5 percent of GDP. Den Rest des Beitrags lesen »

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IWF: Deutsche Wirtschaft in besserem Zustand als die USA

Posted by hkarner - 5. Oktober 2016

Ja, der Einäugige sieht auch besser als der Blinde …! (hfk)

Der IWF überrascht mit einer freundlichen Prognose für Deutschland – und schlechten Nachrichten für Hillary Clinton: Die vielbesungene Erholung der US-Wirtschaft war offenbar eine Fata Morgana.

Der IWF traut der globalen Konjunktur weiter keine großen Sprünge zu. Die Weltwirtschaft dürfte in diesem Jahr etwas an Fahrt verlieren und um 3,1 Prozent zulegen, wie der Internationale Währungsfonds (IWF) am Dienstag in seinem neuen „World Economic Outlook“ mitteilte. Im nächsten Jahr werde es mit 3,4 Prozent etwas stärker bergauf gehen. „Der aktuelle Ausblick bleibt gedämpft.“ Mittelfristig dürfte das Wachstum der Industriestaaten weiter „enttäuschend“ ausfallen, sagte IWF-Chefökonom Maurice Obstfeld. Bei Schwellen- und Entwicklungsländern werde die Konjunktur eher anziehen.

Allerdings muss man bei den IWF-Prognosen immer vorsichtig sein: In Griechenland etwa ist der IWF zum Beispiel mit traumwandlerischer Sicherheit über Jahre falsch gelegen. Auch jetzt sind Fragen angebracht: Etwa, wenn der IWF für Spanien einen Boom angebrochen sieht: Warum ist dann die Arbeitslosigkeit, insbesondere bei Jugendlichen, immer noch so hoch? Den Rest des Beitrags lesen »

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Rethinking Policy at the IMF

Posted by hkarner - 8. Juni 2016

Posted on by iMFdirect

By iMFdirect

The global financial crisis led to a broad rethink of macroeconomic and financial policies in the global academic and policy community. ObstfeldEight months into the job as IMF Chief Economist, Maury Obstfeld reflects on the IMF’s role in this rethinking and in furthering economic and financial stability.

In an interview, Obstfeld notes that given the impacts of IMF decisions on member countries and the global economic system, it is especially important for the institution to constantly re-evaluate its thinking in light of new evidence.

He talks about fiscal policy, citing that “nobody wants needless austerity,” as well as on the Fund’s work on capital flows and trade.

Even as the Fund’s thinking evolves, Obstfeld says that the process has not “fundamentally changed the core of our approach, which is based on open and competitive markets, robust macro policy frameworks, financial stability, and strong institutions.”

IMFSurvey Magazine: Policy Den Rest des Beitrags lesen »

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Neoliberalism: Oversold?

Posted by hkarner - 31. Mai 2016

Dank an H.F.!

Finance & Development, June 2016, Vol. 53, No. 2, IMF

Jonathan D. Ostry, Prakash Loungani, and Davide Furceri

Inside the stock exchange in Santiago, Chile, one of the first countries to adopt a form of neoliberal policies.Instead of delivering growth, some neoliberal policies have increased inequality, in turn jeopardizing durable expansionMilton Friedman in 1982 hailed Chile as an “economic miracle.” Nearly a decade earlier, Chile had turned to policies that have since been widely emulated across the globe. The neoliberal agenda—a label used more by critics than by the architects of the policies—rests on two main planks. The first is increased competition—achieved through deregulation and the opening up of domestic markets, including financial markets, to foreign competition. The second is a smaller role for the state, achieved through privatization and limits on the ability of governments to run fiscal deficits and accumulate debt.­

There has been a strong and widespread global trend toward neoliberalism since the 1980s, according to a composite index that measures the extent to which countries introduced competition in various spheres of economic activity to foster economic growth. As shown in the left panel of Chart 1, Chile’s push started a decade or so earlier than 1982, with subsequent policy changes bringing it ever closer to the United States. Other countries have also steadily implemented neoliberal policies (see Chart 1, right panel).­ Den Rest des Beitrags lesen »

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Global Growth: Too Slow for Too Long

Posted by hkarner - 13. April 2016

Posted on by iMFdirect

maurice-obstfeld2By Maurice Obstfeld

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

Global growth continues, but at an increasingly disappointing pace that leaves the world economy more exposed to negative risks. Growth has been too slow for too long.

The new World Economic Outlook released today anticipates a slight acceleration in growth this year, from 3.1 to 3.2 percent, followed by 3.5 percent growth in 2017. Our projections, however, continue to be progressively less optimistic over time.

The downgraded forecasts reflect a broad-based slowdown across all countries. That slowdown results from continuing trends that we have highlighted in earlier editions of the World Economic Outlook. As always, there is considerable diversity in performance within groups.

The central scenario that the World Economic Outlook projects, however, now looks less likely compared with possible less favorable outcomes. Both to support global growth and to guard against downside risks to that baseline scenario, we propose a three-pronged policy approach based on monetary, fiscal and structural policies. Den Rest des Beitrags lesen »

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Oil Prices and the Global Economy: It’s Complicated

Posted by hkarner - 24. März 2016

Posted on by iMFdirect

By Maurice Obstfeld, Gian Maria Milesi-Ferretti, and Rabah Arezki

Oil prices have been persistently low for well over a year and a half now, but as the April 2016 World Economic Outlook will document, the widely anticipated “shot in the arm” for the global economy has yet to materialize. We argue that, paradoxically, global benefits from low prices will likely appear only after prices have recovered somewhat, and advanced economies have made more progress surmounting the current low interest rate environment. Den Rest des Beitrags lesen »

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Subdued Growth, Diminished Prospects, Action Needed

Posted by hkarner - 20. Januar 2016

Posted on by iMFdirect

By Maurice ObstfeldObstfeld

At the start of 2016, turbulence in financial markets has returned amid renewed concern about risks to global economic growth. The fundamental forces that underlay our October World Economic Outlook projections have not dissipated, and in some respects have intensified, leading us to trim our expectations for future medium-term growth of the world economy.

In the World Economic Outlook Update released today, we still, however, expect growth to pick up this year in most countries.

Despite the modesty of the reduction we see in general growth prospects and the promise of improvement in coming years, downside risks to our central scenario have intensified. In our view, a focus on these risks is the main factor driving recent developments in financial markets.

We may be in for a bumpy ride this year, especially in the emerging and developing world.

Fundamental to the current global conjuncture are the same three forces we highlighted in October: China’s slower growth and rising financial-market risks amid a process of macroeconomic rebalancing away from the traditional industrial and construction sectors; the fall in commodity prices, notably the price of oil; and asynchronous trends in monetary policies, especially between the United States and most other advanced economies. The effects continue to play out. Since mid-October, for example, the price of base metals has declined a further 15 percent while that of oil has declined a further 40 percent.

Paradoxically, while risk-averse investors have focused on the potential negative impacts of these developments, each of them is two-sided and carries a silver lining that should make the negative effects on total world growth less dire than markets now seem to expect—especially over the longer term. China’s rebalancing is essential for its transition to a more sustainable and resilient consumption-based growth model; lower commodity prices benefit consumers and lower production costs; and the Federal Reserve’s well communicated interest-rate increase of December reflects the relatively strong performance of the United States economy, still the world’s largest. Yet, these changes also pose big adjustment challenges for many countries, and it is those that dominate the medium-term outlook.

Global outlook

What are the specific numbers? We project that global economic growth of 3.1 percent in 2015 will accelerate to 3.4 percent in 2016 and 3.6 percent in 2017. The 2016 and 2017 figures are both 0.2 percentage point below the levels we hoped for in October. While emerging market and developing economies account for more than two-thirds of this downward revision, we project they will accelerate moderately in both 2016 and 2017, compared to last year. Advanced economies will accelerate slightly in both 2016 and 2017, but likewise, to growth rates slightly below those that the last World Economic Outlook foresaw.

As always, aggregate averages conceal considerable diversity among individual countries. The small downgrade in our projection of advanced-economy growth is driven by slightly less optimism about the United States. Growth prospects for the euro area, the United Kingdom, and Japan are broadly unchanged.

Looming large in the emerging and developing group are countries facing especially severe multiple challenges and strongly negative 2015 growth, for example, Brazil and Russia (along with its CIS neighbors), whose sharp contractions this year should decelerate over the coming two-year period. However, while reduced from earlier years, growth looks better in other Latin American economies and in emerging and developing Europe. Growth prospects in parts of Asia have diminished somewhat as a result of the unexpectedly big external spillovers from China’s growth transition. In contrast, India, a major net commodity importer, continues to grow at the fastest pace among large emerging economies.

Downside risks

There are a number of specific downside risks to our scenario, and as always, events in an important stressed economy can spill over to others through effects on trade, asset and commodity prices, and confidence.

One downside risk is that China’s economy could encounter rough patches where growth slows more than expected, directly affecting trade partners while disturbing foreign exchange and other financial markets worldwide. We have maintained our 2016 and 2017 growth assessments for China in light of the robust development of its service and “new economy” sectors, as well as fiscal policy actions aimed at supporting demand. But the picture could change farther down the road. Continued strong growth in China is dependent on its authorities’ prompt, decisive action to address remaining imbalances and legacies of past ones. In addition, clear communication of a coherent overall policy strategy, including with respect to the yuan’s exchange rate, is critical both for domestic stability and that of markets abroad.

Depreciating currencies have been useful shock absorbers for many emerging and developing economies, but could eventually expose corporate balance-sheet weaknesses where there are foreign-currency exposures. Related, private capital inflows to emerging and frontier markets came to a virtual halt in the third quarter of 2015, with China accounting for most of the fall. The acceleration and broadening of this trend is a potential threat despite the enhanced buffers provided by international reserves. Another stress indicator is the general increase in sovereign spreads in Latin America and Africa; and a further increase in global risk aversion, for whatever reason, could lead to even tighter financial conditions for vulnerable economies.

Finally, political and geopolitical risks have intensified, not receded, in recent months. Prominent among these, refugee outflows from Syria and Iraq are imposing extreme burdens on neighboring countries and have spilled over into Europe, sparking political discord within the European Union and threatening its current framework for free labor mobility. Rapid absorption of refugees into labor markets will ultimately lift output, but will place up-front demands on public budgets. As difficult as are the challenges for the receiving countries, we must not lose sight of the source-country security concerns that give rise to both internal and external displacements. These impose immense costs, first of all on the refugees themselves.

Need for action

In advanced economies, currently projected growth rates are too low rapidly to reduce high unemployment and other legacies of recent crises, or to spark strong growth in real wages. In emerging and developing economies, currently projected growth rates substantially slow convergence to higher incomes. Action is needed. Policy recommendations must be country-specific, but at a general level there are three priorities.

First, to support aggregate demand in the face of subdued activity and, in some countries, continuing deflationary pressures.

Second, to support economic efficiency and long-term economic growth in the face of evidence that potential growth rates have fallen worldwide over the past decade. An important element here is structural reform, which will be a main theme of the April 2016 World Economic Outlook.

A final need is to further strengthen and widen the international safety net, bolstering global resilience to whatever may lie ahead.

See also Obstfeld video and Infographic.


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The Price of Oil and the Price of Carbon

Posted by hkarner - 2. Dezember 2015

Posted on by iMFdirect

By Rabah Arezki and Maurice ObstfeldObstfeld

“The human influence on the climate system is clear and is evident from the increasing greenhouse gas concentrations in the atmosphere, positive radiative forcing, observed warming, and understanding of the climate system.”Intergovernmental Panel on Climate Change, Fifth Assessment Report

Fossil fuel prices are likely to stay “low for long.” Notwithstanding important recent progress in developing renewable fuel sources, low fossil fuel prices could discourage further innovation in and adoption of cleaner energy technologies. The result would be higher emissions of carbon dioxide and other greenhouse gases.

Policymakers should not allow low energy prices to derail the clean energy transition. Action to restore appropriate price incentives, notably through corrective carbon pricing, is urgently needed to lower the risk of irreversible and potentially devastating effects of climate change. That approach also offers fiscal benefits.

Low for long Den Rest des Beitrags lesen »

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IWF sieht Zerfalls-Erscheinungen in der EU

Posted by hkarner - 11. November 2015

Deutsche Wirtschafts Nachrichten  | 

Der Internationale Währungsfonds warnt vor einem Zerfall der EU: Die Flüchtlingskrise und die Entwicklung in Großbritannien signalisierten einen Trend, der dem Chefökonom des IWF „viele Sorgen“ macht.

ObstfeldMaurice Obstfeld ist Chefökonom des IWF.

Die Flüchtlingskrise und die Erwägungen über einen Ausstieg Großbritanniens aus der EU gefährden nach Ansicht des Chefökonomen des Internationalen Währungsfonds (IWF), Maurice Obstfeld, die weitere Integration der europäischen Wirtschaft. „Ich mache mir viele Sorgen über den starken Trend in Europa, von der Marktintegration Abstand zu nehmen“, sagte Obstfeld der Nachrichtenagentur AFP. Mit dieser diplomatischen Formulierung meint der IWF-Ökonom mehr als nur eine Erweiterung: Der IWF hat stets gefordert, dass die EU zu einer vollständigen Wirtschafts- und Finanzunion werden müsse, um bestehen zu können. Den Rest des Beitrags lesen »

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