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Inclusive Growth

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Global Housing Watch

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Forecasting Follies

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Energy & Commodities

Toward Inclusive Globalization

Jonathan Ostry writes: “Economists tend to be advocates of globalization. The benefits of specialization and exchange are evident within a country’s borders: no one would seriously suggest that impeding the flows of goods, labour and capital within a country would raise national welfare. Globalization extends the possibilities of specialization beyond national boundaries. Recent work suggests, however, that while globalization is great in theory, vigilance is needed about it in practice.

The three main components of globalization – goods, labour, and capital – are associated with different costs and benefits. The preponderance of the evidence suggests that trade has positive impacts on aggregate incomes, but many people do lose out. The economic benefits of migration are very high, but it too has distributional consequences and impacts on social cohesion.

The case for globalization is weakest when it comes to free flows of capital across national boundaries (“financial globalization”). The growth benefits claimed for these policies have proven elusive. At the same time, they are associated with an increase in inequality. Hence they pose a dilemma for proponents of globalization.

There are also interactions between financial globalization and other policies. In particular, financial globalization binds the conduct of domestic fiscal policy and leads to greater consolidation, which also has distributional effects.”

Continue reading here.

jostry

Jonathan Ostry

Jonathan Ostry writes: “Economists tend to be advocates of globalization. The benefits of specialization and exchange are evident within a country’s borders: no one would seriously suggest that impeding the flows of goods, labour and capital within a country would raise national welfare. Globalization extends the possibilities of specialization beyond national boundaries. Recent work suggests, however, that while globalization is great in theory, vigilance is needed about it in practice.

The three main components of globalization –

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Posted by at 8:57 AM

Labels: Unemployment

IMF WEO Forecasts: A Shifting Economic Landscape

The latest World Economic Outlook (WEO) Update says that: “After a lackluster outturn in 2016, economic activity is projected to pick up pace in 2017 and 2018, especially in emerging market and developing economies. However, there is a wide dispersion of possible outcomes around the projections, given uncertainty surrounding the policy stance of the incoming U.S. administration and its global ramifications. The assumptions underpinning the forecast should be more specific by the time of the April 2017 World Economic Outlook, as more clarity emerges on U.S. policies and their implications for the global economy.”

Continue reading here.

The latest World Economic Outlook (WEO) Update says that: “After a lackluster outturn in 2016, economic activity is projected to pick up pace in 2017 and 2018, especially in emerging market and developing economies. However, there is a wide dispersion of possible outcomes around the projections, given uncertainty surrounding the policy stance of the incoming U.S. administration and its global ramifications. The assumptions underpinning the forecast should be more specific by the time of the April 2017 World Economic Outlook,

Read the full article…

Posted by at 8:50 PM

Labels: Economic Forecast

An Economy for the 99%

According to a new report by Oxfam: “Eight men own the same wealth as the 3.6 billion people who make up the poorest half of humanity [The 8 men are Bill Gates, Amancio Ortega, Warren Buffet, Carlos Slim, Jeff Bezos, Mark Zuckerberg, Larry Ellison, and Michael Bloomberg] (…). Oxfam’s report, ‘An economy for the 99 percent’, shows that the gap between rich and poor is far greater than had been feared. It details how big business and the super-rich are fuelling the inequality crisis by dodging taxes, driving down wages and using their power to influence politics. It calls for a fundamental change in the way we manage our economies so that they work for all people, and not just a fortunate few. New and better data on the distribution of global wealth – particularly in India and China – indicates that the poorest half of the world has less wealth than had been previously thought.  Had this new data been available last year, it would have shown that nine billionaires owned the same wealth as the poorest half of the planet, and not 62, as Oxfam calculated at the time.” See the press release here.

According to a new report by Oxfam: “Eight men own the same wealth as the 3.6 billion people who make up the poorest half of humanity [The 8 men are Bill Gates, Amancio Ortega, Warren Buffet, Carlos Slim, Jeff Bezos, Mark Zuckerberg, Larry Ellison, and Michael Bloomberg] (…). Oxfam’s report, ‘An economy for the 99 percent’, shows that the gap between rich and poor is far greater than had been feared.

Read the full article…

Posted by at 5:48 AM

Labels: Unemployment

IMF Executive Board Discusses Macroeconomic Prospects and Challenges in LIDCs

From the IMF Executive Board Discussion:

The sharp realignment of global commodity prices has been a major setback for commodity-exporting LIDCs, while generally benefitting others. As a result, growth prospects have become increasingly divergent.

In an era of subdued commodity prices, prospects for commodity exporters are heavily influenced by how successfully they can implement policies to confront high fiscal deficits, reduced foreign reserves, and elevated economic and financial stress.

The quantity, quality and accessibility of infrastructure in LIDCs is considerably lower than in other economies and enhancing the role of the private sector in its delivery is a priority for many.

Continue reading here.

From the IMF Executive Board Discussion:

The sharp realignment of global commodity prices has been a major setback for commodity-exporting LIDCs, while generally benefitting others. As a result, growth prospects have become increasingly divergent.

In an era of subdued commodity prices, prospects for commodity exporters are heavily influenced by how successfully they can implement policies to confront high fiscal deficits, reduced foreign reserves, and elevated economic and financial stress.

The quantity,

Read the full article…

Posted by at 12:19 PM

Labels: Unemployment

Decoupling of Emissions and GDP: Now you see it, now you don’t

There are conflicting claims about whether emissions growth and GDP growth have decoupled. My presentation today shows that some of this debate is due to a failure to distinguish cycles from trends: there is an Environmental Okun’s Law (a cyclical relationship between emissions and GDP) which often obscures the Environmental Kuznets Curve (the trend relationship between emissions and GDP).

My ongoing work casts relationships between emissions and economic growth in much simpler terms than is typically done in the climate change literature. My co-authors and I use the trend and cycle decomposition that is familiar to most economists, particularly macroeconomists. We then show that the cyclical relationship between emissions and real GDP—akin to an Okun’s Law, in the terminology of macroeconomists—obscures the trend relationship—the Kuznets Curve that is the focus of many papers in the climate change literature. Once the cyclical relationship is stripped away, the trends do show some evidence of decoupling in the richer nations, particularly in Europe.

We then apply the framework to take into account the effects of international trade. That is, we distinguish between production-based and consumption-based emissions. This makes a big difference to the results. Specifically, the evidence for decoupling among the top emitting countries gets much weaker, including for many countries in Europe.

There are conflicting claims about whether emissions growth and GDP growth have decoupled. My presentation today shows that some of this debate is due to a failure to distinguish cycles from trends: there is an Environmental Okun’s Law (a cyclical relationship between emissions and GDP) which often obscures the Environmental Kuznets Curve (the trend relationship between emissions and GDP).

My ongoing work casts relationships between emissions and economic growth in much simpler terms than is typically done in the climate change literature.

Read the full article…

Posted by at 10:32 AM

Labels: Energy, Macro Demystified

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