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You are looking at 1 - 9 of 9 items for :

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Cover IMF Staff Country Reports
Benin: Selected Issues
International Monetary Fund. African Dept.

Selected Issues

Keywords:
ISCR; CR; Benin; authority; administration; GaR estimate; GaR method; General government expenditure growth; IMF commodity terms of trade database; regression method; Growth-at-risk assessment; Commodity prices
Cover IMF Working Papers
The Growth Comeback in Developing Economies: A New Hope or Back to the Future?
Mr. John C Bluedorn, Rupa Duttagupta, Mr. Jaime Guajardo, and Miss Nkunde Mwase
Growth takeoffs in developing economies have rebounded in the past two decades. Although recent takeoffs have lasted longer than takeoffs before the 1990s, a key question is whether they could unravel like some did in the past. This paper finds that recent takeoffs are associated with stronger economic conditions, such as lower post-takeoff debt and inflation levels; more competitive real exchange rates; and better structural reforms and institutions. The chances of starting a takeoff in the 2000s was triple that before the 1990s, with domestic conditions accounting for most of the increase. The findings suggest that if today’s dynamic developing economies sustain their improved policies; they are more likely to stay on course compared to many of their predecessors.
Keywords:
WP; growth takeoff; exchange rate; economy group; dynamic LIC; IMF staff calculation; growth; takeoff; development; low-income countries; convergence; LIC takeoff; saving-investment gap; Real exchange rates; Income inequality; Export performance; Global
Cover IMF Working Papers
The Effects of Inflationon Economic Growth: Lessons From Latin America
Mr. Jose De Gregorio
This paper investigates the relationship between inflation and long-run growth. It presents an endogenous growth model that illustrates the channels through which inflation affects growth. The model highlights the effects of inflation on the productivity of capital and the rate of capital accumulation. The reduction in growth is caused by a diversion of resources away from activities that lead to faster rates of growth toward activities associated with reducing the costs of inflation. The negative association between inflation and growth is assessed empirically for a sample group of Latin American countries.
Keywords:
WP; inflation rate; investment rate; rate of inflation; factor productivity; growth effect; capital mobility; forecasting inflation; Inflation; Consumption; Capital productivity; Labor supply; Government consumption; Eastern Europe
Cover IMF Working Papers
Too Low for Too Long: Could Extended Periods of Ultra Easy Monetary Policy Have Harmful Effects?
Mr. Etibar Jafarov and Enrico Minnella
Extended periods of ultra-easy monetary policy in advanced economies have rekindled debates about the zombification of weak companies and its impact on resource allocation, economic growth, inflation, and financial stability. Using both firm-level and macroeconomic data, we find that recessions are a critical factor in the rapid increase in the number of zombie firms. Expansionary monetary policy can help reduce zombification when interest rates are at the zero lower bound (ZBL), but a too-accommodative monetary policy for extended periods is associated with a higher probability of zombification. Small and medium enterprises are more likely to become zombie firms. This raises concerns about the sustainability of too-easy monetary policy implementation, especially in countries where growth is lackluster. Our findings imply a tradeoff between conducting a countercyclical monetary policy, which also helps contain the increase in the number of zombie firms in cyclical downturns, and using an expansionary monetary policy for long periods, which may lead to a combination of low interest rates, low growth, and high financial vulnerability. Such a tradeoff is not a concern currently when most countries are tightening their monetary policy stance, but policymakers should be mindful of it during future recessions.
Keywords:
Too Low for Too Long; Zombie Firms; Financial Stability; zombie firm; countercyclical monetary policy; monetary policy stance; sectoral zombie share; share of zombie; Economic recession; Output gap; Global financial crisis of 2008-2009; Monetary expansion; Unconventional monetary policies; Global
Cover IMF Working Papers
The Term Structure of Growth-at-Risk
Mr. Tobias Adrian, Federico Grinberg, Nellie Liang, and Sheheryar Malik
Using panel quantile regressions for 11 advanced and 10 emerging market economies, we show that the conditional distribution of GDP growth depends on financial conditions, with growth-at-risk (GaR)—defined as growth at the lower 5th percentile—more responsive than the median or upper percentiles. In addition, the term structure of GaR features an intertemporal tradeoff: GaR is higher in the short run; but lower in the medium run when initial financial conditions are loose relative to typical levels, and the tradeoff is amplified by a credit boom. This shift in the growth distribution generally is not incorporated when solving dynamic stochastic general equilibrium models with macrofinancial linkages, which suggests downside risks to GDP growth are systematically underestimated.
Keywords:
WP; dummy variable; Gaussian distribution; monetary policy; real GDP; time series; downside risk; macrofinancial linkages; volatility paradox; financial stability; quantile regression; term structure; GaR estimate; FCI group; growth distribution; coefficient estimate; GaR measure; projections estimation method; GaR decline; credit growth; FCI decile group; OLS panel estimation method; Growth-at-risk assessment; Credit booms; Credit; Financial sector risk; Global
Cover IMF Working Papers
Macrofinancial Linkages and Growth at Risk in the Dominican Republic
Olga Bespalova and Mrs. Marina V Rousset
This paper uses the Growth-at-Risk (GaR) methodology to examine how macrofinancial conditions affect the growth outlook and its probability distribution. Using this approach, we evaluate risks to GDP growth in the Dominican Republic using quarterly data for 1996-2018. We group macrofinancial conditions in five principal determinants, based on 32 indicators. The Dominican Republic’s growth distribution appears most vulnerable to negative shocks to domestic financial conditions, domestic leverage, domestic demand, and external demand, with additional repercussions from the external cost of borrowing in the longer run. Our findings show that domestic monetary policy plays a particularly important role in reducing growth vulnerabilities when the economy is weak.
Keywords:
WP; financial condition; interest rate; borrowing cost; transmission mechanism; Dominican Republic; Growth at Risk; financial conditions; macrofinancial linkages; macroeconomic condition; liquidity condition; impact monetary policy; external cost; financial-market openness; GaR methodology; external borrowing costs; Growth-at-Risk methodology; monetary policy variable; Credit; Liquidity; Global
Cover IMF Working Papers
Growth at Risk: Concept and Application in IMF Country Surveillance
Mr. Ananthakrishnan Prasad, Mr. Selim A Elekdag, Mr. Phakawa Jeasakul, Romain Lafarguette, Mr. Adrian Alter, Alan Xiaochen Feng, and Changchun Wang
The growth-at-risk (GaR) framework links current macrofinancial conditions to the distribution of future growth. Its main strength is its ability to assess the entire distribution of future GDP growth (in contrast to point forecasts), quantify macrofinancial risks in terms of growth, and monitor the evolution of risks to economic activity over time. By using GaR analysis, policymakers can quantify the likelihood of risk scenarios, which would serve as a basis for preemptive action. This paper offers practical guidance on how to conduct GaR analysis and draws lessons from country case studies. It also discusses an Excel-based GaR tool developed to support the IMF’s bilateral surveillance efforts.
Keywords:
WP; GaR analysis; GaR framework; price of risk; asset price; GDP growth; accommodative financial conditions; growth distribution; GaR tool; house price growth; GaR concept; GaR approach; scenario analysis; financial conditions partition; term premium; Growth-at-risk assessment; Asset prices; Housing prices; Financial statements; Credit aggregates; Global
Cover IMF Staff Country Reports
Panama: Selected Issues
International Monetary Fund. Western Hemisphere Dept.

Selected Issues

Keywords:
ISCR; CR; Panama; asset quality; financial condition; bank; price of risk; financial conditions in Panama; risk variable; dollarized economy; risk sentiment; Financial sector risk; Growth-at-risk assessment; Macroprudential policy; Global financial crisis of 2008-2009
Cover Staff Discussion Notes
A Monitoring Framework for Global Financial Stability
Mr. Tobias Adrian, Mr. Dong He, Nellie Liang, and Mr. Fabio M Natalucci
This paper describes the conceptual framework that guides assessments of financial stability risks for multilateral surveillance, as currently presented in the Global Financial Stability Report (GFSR). The framework emphasizes consistency in measuring financial vulnerabilities across countries and over time and offers a summary statistic to quantify aggregate financial stability risks. The two parts of the empirical approach—a matrix of specific vulnerabilities and a summary measure of financial stability risks—are distinct but highly complementary for monitoring and policymaking.
Keywords:
SDN; financial condition; price; risk; GDP; downside risk; Financial stability; financial conditions; macroprudential policy; price of risk; term structure; financial market risk appetite; fire-sale risk; loose financial conditions; growth distribution; financial conditions switch; equity price; Financial sector risk; Financial sector stability; Growth-at-risk assessment; Financial conditions index; Global