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Tag Archives: spillovers

Global Trade Needs More Supply Diversity, Not Less

By Davide Malacrino, Adil Mohommad, and Andrea Presbitero عربي, 中文, Español, Français, 日本語, Português, Русский Countries with trade partners that implemented more stringent lockdowns had a sharper drop in imports. Though trade flows have adjusted, more diversified global value chains could help lessen the impact of future shocks. The demand and supply shocks unleashed by the pandemic were expected to lead to a dramatic collapse in trade, but international commerce has proven more resilient...

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Crypto Prices Move More in Sync With Stocks, Posing New Risks

By Tobias Adrian, Tara Iyer and Mahvash S. Qureshi There’s a growing interconnectedness between virtual assets and financial markets. Crypto assets such as Bitcoin have matured from an obscure asset class with few users to an integral part of the digital asset revolution, raising financial stability concerns. Crypto assets are no longer on the fringe of the financial system. The market value of these novel assets rose to nearly $3 trillion in November from $620 billion in 2017, on soaring...

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Emerging Economies Must Prepare for Fed Policy Tightening

By Stephan Danninger, Kenneth Kang and Hélène Poirson 中文, Español, Русский Policymakers may need to react by pulling multiple policy levers, depending on Fed actions and their own challenges at home. For most of last year, investors priced in a temporary rise in inflation in the United States given the unsteady economic recovery and a slow unravelling of supply bottlenecks. Now sentiment has shifted. Prices are rising at the fastest pace in almost four decades and the tight labor market has...

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Why Basic Science Matters for Economic Growth

By Philip Barrett, Niels-Jakob Hansen, Jean-Marc Natal and Diaa Noureldin عربي, 中文, Español, Français, Português Public investment in basic research will pay for itself. The pandemic has rolled back decades of economic progress and wrought havoc on public finances. To build back better and fight climate change, sizable public investment needs to be sustainably financed. Boosting long-term growth—and thereby tax revenue—has rarely felt more pressing. But what are the drivers of long-term...

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Chart of the WeekHow a Collective Infrastructure Push Will Boost Global Growth

By IMFBlog عربي, 中文, Español, Français, Português, Русский  With vaccines around the corner, there is increased hope that the pandemic could soon be under better control. That said, the need for cooperative efforts to work toward a better future has never been greater. Priority areas relate to the need to produce and distribute vaccines globally, tackle climate change, and bolster the economic recovery from the crisis. An IMF report published ahead of the G20 leaders meeting argues that a...

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COVID-19 Pandemic and the Caribbean: Navigating Uncharted Waters

By Krishna Srinivasan, Sònia Muñoz, and Varapat Chensavasdijai Español, Français As the COVID-19 pandemic continues to spread across the globe—bringing severe human and economic costs—the Caribbean is no exception. With over 1,000 confirmed cases, many countries have taken strong containment measures, such as border closures and lockdowns, to “flatten the curve.” But the “sudden stop” in tourism is sharply slowing economic activity in the Caribbean, and growth in the region is projected to...

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Finding Solid Footing for the Global Economy

By Kristalina Georgieva As the Group of Twenty industrialized and emerging market economies (G-20) finance ministers and central bank governors gather in Riyadh this week, they face an uncertain economic landscape. After disappointing growth in 2019, we began to see signs of stabilization and risk reduction, including the Phase 1 U.S.-China trade deal. In January, the IMF projected growth to strengthen from 2.9 percent in 2019 to 3.3 percent in 2020 and 3.4 percent in 2021. This projected...

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Economic Forces, Not Tariffs, Drive Changes in Trade Balances

By Johannes Eugster, Florence Jaumotte, Margaux MacDonald, and Roberto Piazza عربي, 中文, Español, 日本語, Português New IMF research finds that macroeconomic factors, not tariffs, explain most of the changes in trade balances between two countries. Bilateral trade balances (the difference in the value of exports and imports between two countries) have come under scrutiny recently. Some policymakers are concerned that their large and rising size are the result of uneven measures that distort...

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How To Deal With Failed Banks

By Deniz Igan July 3, 2018 Versions in Español, Português Reforms since the global financial crisis have made bail-ins a credible option and bail-outs less likely (photo: iStock by Getty Images) During the global financial crisis, policymakers faced a steep trade-off in handling bank failures. Using public funds to rescue failing banks (bail-outs) could weaken market discipline and lead to excessive risk taking—the moral hazard effect. Letting private investors absorb the losses...

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Chart of the Week: The Rise of Corporate Giants

By Federico J. Díez and Daniel Leigh June 6, 2018 Version in  Español The market power of “superstar” companies in advanced economies is growing (photo: iStock by Getty Images) The growing economic wealth and power of big companies—from airlines to pharmaceuticals to high-tech companies—has raised concerns about too much concentration and market power in the hands of too few. In particular, in advanced economies, rising corporate market power has been blamed for low investment despite...

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