This Selected Issues paper reviews Canada’s business tax system, looking at the incentive effects of the country’s business tax regime and their implications for output and employment. It presents estimates of marginal effective tax rates on corporate-source income in Canada and comparator countries across sectors, asset classes, means of finance, and asset ownership. The paper also examines labor markets in Canada. It notes that unemployment rates in Canada have risen across all demographic groups, industries, and regions, although young and less-educated workers and workers in agriculture and primary industries have been most severely affected.
International Monetary Fund. Western Hemisphere Dept.
This Selected Issues paper for Chile describes the postcrisis recovery experience. The recovery from the 2008–2009 global crisis has been markedly different both among advanced and emerging economies. The steady improvement in the labor wedge-distortions related to the consumption leisure decision helped support the recovery. In Chile, the growth generated by this improvement, was sufficient to overcome the relatively weak performance of efficiency (TFP). Chile’s recovery has been characterized by strong investment growth, 0.8 percentage points higher than the precrisis trend. The establishment of the Financial Stability Council in 2011 is an important step to ensure close coordination among the institutions involved in Chile’s financial prudential framework.
This Selected Issues paper assesses the implications of a significant increase in the flow of external financing and grants on real GDP growth in Ethiopia. The paper presents an analysis of the sources of growth during 1991/92–2003/04, as well as an assessment of potential GDP growth. The paper also seeks to assess the historical relationship between foreign aid and the performance of the external sector in Ethiopia to establish whether foreign aid inflows have had an adverse effect on the tradable goods sector in the past.
In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.
This Selected Issues paper examines the sources of real growth in Guinea. It identifies and quantifies the impact on real GDP growth of both the exogenous shocks and the policy changes that have occurred since 2000. The paper offers, first, some empirical evidence on real GDP growth in Guinea and then analyzes the sources of growth using the standard framework of growth accounting. The paper also analyzes and quantifies the effect that some exogenous shocks and policy changes have had on growth.
The IMF Research Bulletin, a quarterly publication, selectively summarizes research and analytical work done by various departments at the IMF, and also provides a listing of research documents and other research-related activities, including conferences and seminars. The Bulletin is intended to serve as a summary guide to research done at the IMF on various topics, and to provide a better perspective on the analytical underpinnings of the IMF’s operational work.
This Selected Issues paper on Papua New Guinea reports that although economic cycles have generally paralleled the many mineral sector booms and busts, the downward trend in growth rates may reflect other factors. Papua New Guinea’s economy is dominated by a large labor-intensive agricultural sector and a capital-intensive oil and minerals sector. The formal sector consists of enclave extractive industries, cash crop production, and a small, import-substituting manufacturing sector. The importance of the agriculture sector is about the same as at independence, reflecting structural impediments that have deterred more rapid growth.
Sustaining a high rate of economic growth is the major policy issue facing the Arab economies. A detailed analysis of growth, investment, and savings for the period 1971-96, including through a growth accounting exercise, shows that increasing long-run growth requires improvements in both investment and domestic savings. In the past, the Arab region’s growth was overly reliant on volatile external sources of funding, and total factor productivity growth was too low. The paper discusses the policy priorities to overcome the legacy of poor growth.
With India's GDP expanding at a rate above 8 percent in recent years, the debate about whether India is overheating revolves mainly about whether growth is above potential-that is, whether the economy is exceeding its "speed limit." This paper attempts to shed light on this debate by providing up-to-date projections of India's potential growth, including by clarifying differences in underlying assumptions used by various researchers that lead to a range of estimates. Estimates of potential growth on this basis range from 7.4 percent to 8.1 percent for 2006/07, and about 8 percent for the medium term. The medium-term potential estimates have risks on both sides: productivity gains and investment could be volatile, but determined reforms could sustain strong productivity growth.