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Erez Aiden, Jean-Baptiste Michel, and Coyle Diane

This chapter discusses the story of European integration in what is known as the European Union. The decision in 1951 by six European nations to pool coal and steel production under a common authority—the European Coal and Steel Community—marked the beginning of European integration. French statesman and political visionary Robert Schuman proposed the coal and steel community in 1950. The chapter also highlights that the 28-member European Union, built around common policies and shared institutions, has proved robust to many challenges and has accommodated great change used by 18 countries. The European Union was also awarded the 2012 Nobel Peace Prize. The study shows that the 2008 global financial crisis laid bare fault lines, exposing tensions between EU members and stresses and gaps in institutions and policies that Europe’s political leaders are working hard to address. The IMF’s chief for Europe argues that what Europe needs is more integration, not less.

Joel E. Cohen and David E. Bloom

The paper highlights that over the past century, access to education has increased enormously, illiteracy has fallen dramatically, and a higher proportion of people are completing primary, secondary, or tertiary education than ever before. But huge problems remain. About 115 million children of primary school age are not currently enrolled in school. Most are illiterate and live in absolute poverty—the majority female. Some 264 million children of secondary school age are not currently enrolled, and the quality of schooling is often low.

International Monetary Fund
This paper on the Republic of Congo’s staff-monitored program (SMP) reports that the authorities and civil society pledged to work together to make resource management more transparent. The authorities have reached understandings with IMF staff on an SMP for April-September 2007. The SMP aims at making progress toward fiscal sustainability, enhancing public financial management, and improving governance and transparency. A solid track record of policy implementation in the context of the SMP would pave the way for discussions on a Poverty Reduction and Growth Facility arrangement to resume by end-2007.
International Monetary Fund. Research Dept.
This paper discusses impact of purchasing power on deferred payments. The importance of the economic consequences for the economy of the adoption of purchasing power guarantees would, of course, depend on the range within which these guarantees were applied. Any practical proposals are therefore predicated on the assumption that, for the country in question, there is uncertainty about future general price movements. The problem which purchasing power guarantees are intended to solve is shown in its simplest form in the settlement of a private debt. In countries suffering from inflation, the improvement in the lender–borrower relationship would also be strengthened, since, with a purchasing power clause in the contract, the stigma of usury that would attach to any attempt to insist on high nominal rates of interest in order to ensure a proper real return would be avoided. The legal and social sanctions against usury in money terms give rise to a paradox in discussing the use of a purchasing power clause. The analytical discussion seems to show that, if anything, the borrower would gain more than the lender from the use of the clause—simply because interest payments are likely to be larger relative to his net income, and to have their real value stabilized would have a greater stabilizing effect on real income.