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Tag Archives: debt sustainability

In It Together: Protecting the Health of Africa’s People and their Economies

This blog is part of a series providing regional analysis on the effects of the coronavirus. By Karen Ongley and Abebe Aemro Selassie 中文, Español, Français, Português The growing presence of COVID‑19 in sub-Saharan Africa threatens the same human costs as elsewhere in the world. The economic costs could be just as devastating. Sweeping measures For their part, countries in sub-Saharan Africa are acting decisively, taking sweeping measures to halt the advance of the virus, with limits on...

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Trade and Remittances Within Africa

By Francisco Arizala, Matthieu Bellon, Margaux MacDonald, Montfort Mlachila, and Mustafa Y. Yenice August 1, 2018  Versions in Français, Português Countries in sub-Saharan Africa are more closely tied than ever, thanks to rising trade with one another and remittances (photo: AfricaImages/Getty Images by iStock) Contrary to popular belief, countries in sub-Saharan Africa are more closely tied than ever, thanks to rising trade with one another and remittances—the money people send home...

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Fiscal Rules: Make them Easy to Love and Hard to Cheat

By Xavier Debrun, Luc Eyraud, Andrew Hodge, Victor Lledo, Catherine Pattillo, Abdelhak Senhadji April 13, 2018 Versions in Português  (Portuguese) The national debt clock in New York City: a fiscal rule, like the debt ceiling, should not be set too low or too high. (photo: Frances M. Roberts/Newscom) Rules to contain lavish government deficits are most effective if countries design them to be simple, flexible, and enforceable in the face of changing economic circumstances. In new...

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Two to Tango—Inflation Management in Unusual Times

By Vitor Gaspar, Maurice Obstfeld, and Chang Yong Rhee June 15, 2017 Shinjuku shopping district, Tokyo, Japan. Strong coordination between monetary and fiscal policies can help Japan tackle its low inflation (photo: Nikada/iStock/Getty Images) Monetary and fiscal policies interact in complex ways. Yet modern institutional arrangements typically feature a strict separation of responsibilities. For example, the central bank targets inflation and smooths business cycle fluctuations, while...

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Dealing with Sovereign Debt—The IMF Perspective

By Sean Hagan, Maurice Obstfeld, and Poul M. Thomsen Version in Español (Spanish) Debt is central to the functioning of a modern economy. Firms can use it to finance investments in future productivity. Households can use it to finance lumpy purchases, such as big consumer durables, or a home. Sometimes, however, firms’ investments do not pan out or a household’s main earner loses his or her job. Countries’ legal systems generally recognize that in these cases, debtors and creditors...

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The IMF is Not Asking Greece for More Austerity

By Maurice Obstfeld and Poul M. Thomsen Versions in عربي (Arabic); Français (French); Deutsch (German); ελληνικά (Greek); and Español (Spanish) 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...

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Greece: Toward a Workable Program

(Version in Español) Having successfully pulled Greece from the brink last summer and subsequently stabilized the economy, the government of Alexis Tsipras is now discussing with its European partners and the IMF a comprehensive multi-year program that can secure a lasting recovery and make debt sustainable. While discussions continue, there have been some misperceptions about the International Monetary Fund’s views and role in the process. I thought it would be useful to clarify issues....

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