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iMFdirect
iMFdirect features views by IMF economists and officials about pressing issues in the global economy. The views expressed are those of the author(s) and do not necessarily represent the views of the IMF and its Executive Board.

iMFdirect

Chart of the WeekFintech, Fiber-optics, and Financial Inclusion

By IMFBlog Peoples’ connection to new technology is built on the backbone of electrical and fiber-optic cables running beneath our feet—and under oceans. In 2010, most economies that were not connected to the modern, cabled internet could be found in the Pacific. However, this is no longer the case, and by 2020 the region will be almost completely connected. Governments could harness technology to improve tax collection, government transfers, trade financing, and land registries. Our...

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Taming the Currency Hype

By Gustavo Adler, Luis Cubeddu, and Gita Gopinath Escalating trade tensions are taking a toll on the global economy and are partly responsible for the recent downward revisions to our growth forecasts for 2019-20. Facing sluggish growth and below-target inflation, many advanced and emerging market economies have appropriately eased monetary policy, yet this has prompted concerns over so-called beggar-thy-neighbor policies and fears of a currency war. In this blog post, we discuss the...

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chart of the weekFuel for Thought: Ditch the Subsidies

By IMFBlog Pensions, education, healthcare, better infrastructure, technology, and climate change: fiscal policymakers have their work cut out for them on many fronts.  Whether you live in a rapidly aging advanced economy,  or a low-income or emerging market economy with a young, booming population, all these issues matter for you.  As the Fiscal Monitor in April 2019 shows, government policies on taxes and spending have to adapt and should shift to growth-enhancing investment.  This means,...

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US Business Investment: Rising Market Power Mutes Tax Cut Impact

By Emanuel Kopp, Daniel Leigh, and Suchanan Tambunlertchai US business investment has been on the rise. Since the passage of the Tax Cuts and Jobs Act at the end of 2017, US businesses have bought more machinery, developed software, and created new intellectual property. Some believe that the key to this growth in business investment has been the Act’s cut to the corporate tax rate from 35 percent to 21 percent, which lowered the cost of capital. Lower capital costs could, at least...

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Chart of the WeekCanada’s Housing Market Slowdown

By IMFBlog Following a period of escalating prices, Canada’s housing market is cooling. Measures designed to strengthen financial stability such as more stringent tests of borrowers’ ability to repay their loans, along with higher interest rates, combined to make mortgage financing more expensive. As a result, residential mortgage credit slowed to just 3.4 percent annual growth in December 2018. Nationwide, house prices are 2.5 percent lower than the peak in mid-2018. This week’s chart of...

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Outlook for Latin America and the Caribbean: A Stalling Recovery

By Alejandro Werner Español Economic activity in Latin America and the Caribbean remains sluggish. Real GDP is expected to grow by 0.6 percent in 2019—the slowest rate since 2016—before rising to 2.3 percent in 2020. The weak momentum reflects negative surprises in the first half of 2019, elevated domestic policy uncertainty in some large economies, heightened US-China trade tensions, and somewhat lower global growth. Elevated policy uncertainty in some large economies of the region has...

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chart of the weekUS$100 Bill on the Rise

By IMFBlog A curious thing has happened in US currency: the $100 bill recently overtook the ubiquitous $1 bill in circulation volume, for the first time in history. In other words, the most valuable banknote in the United States became the most widely circulated. As we show in our chart of the week, based on an article in the IMF’s Finance & Development magazine, there are more $100 bills circulating now than ever before, roughly doubling in volume since the global financial crisis....

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Sluggish Global Growth Calls for Supportive Policies

By Gita Gopinath عربي, 中文, Español, Français, 日本語, Português, Русский In our July update of the World Economic Outlook we are revising downward our projection for global growth to 3.2 percent in 2019 and 3.5 percent in 2020. While this is a modest revision of 0.1 percentage points for both years relative to our projections in April, it comes on top of previous significant downward revisions. The revision for 2019 reflects negative surprises for growth in emerging market and developing...

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Rebalancing the Global Economy: Some Progress but Challenges Ahead

By Gita Gopinath Español, 日本語 Following the global financial crisis, overall current account surpluses and deficits fell sharply from about 6 percent of global GDP in 2007 to about 3.5 percent in 2013. Since then, as shown in our new External Sector Report, global current account imbalances have declined only slightly to 3 percent of world GDP in 2018, while rotating toward advanced economies and away from emerging economies, including China whose current account is now broadly in line with...

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Chart of the weekCorporate Tax Rates: How Low Can You Go

By IMFBlog In life, two things are certain: death and taxes, the saying goes. Unless you are a large multinational corporation, in which case, maybe not.  Over the past 30 years, corporate tax rates in all countries have fallen to very low levels, as we show in our chart of the week. This is a problem on several fronts and is one of the reasons why a new approach to international corporate taxation is urgent. First, the ease with which multinationals seem able to avoid tax, combined with...

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