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Business and Economics > Banks and Banking

You are looking at 1 - 10 of 89 items for :

  • Type: Journal Issue x
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Cover IMF Staff Country Reports
Georgia: Selected Issues
International Monetary Fund. Middle East and Central Asia Dept.
This Selected Issues paper explores drivers of inflation and monetary policy in Georgia. Inflation spiked in Georgia following the pandemic and Russia’s war in Ukraine. A positive output gap indicates that high demand is generating inflationary pressure in the economy. Estimates suggest tighter monetary policy in 2021 helped significantly lower peak inflation in 2022. One response to uncertainty is for monetary policy makers to act more cautiously – responding less vigorously with monetary policy to shocks. Given the challenges in managing inflation in a highly dollarized, small open-economy prone to large external shocks, it is important to look at the drivers of inflation in Georgia, the monetary policy stance including the natural rate, the transmission mechanism including the impact of dollarization, and the appropriate monetary policy path going forward. Using a range of approaches, IMF establish that monetary policy in Georgia is effective, that it is close to neutral, and that heightened uncertainty supports a gradual policy normalization.
Keywords:
commodity import price index; Georgia population projection; trend inflation; IMF staff calculation; inflation projection; Inflation; Labor markets; Unemployment; Employment; Central Asia; Middle East
Cover World Economic Outlook, April 2021
World Economic Outlook, April 2021
Managing Divergent Recoveries
International Monetary Fund. Research Dept.

Abstract

The global economy is climbing out from the depths to which it had plummeted during the Great Lockdown in April. But with the COVID-19 pandemic continuing to spread, many countries have slowed reopening and some are reinstating partial lockdowns to protect susceptible populations. While recovery in China has been faster than expected, the global economy’s long ascent back to pre-pandemic levels of activity remains prone to setbacks.

Keywords:
productivity shock; headline inflation; retention policy; job retention; IMF staff calculation; reallocation policy; Emerging and frontier financial markets; COVID-19; Unemployment; Labor markets; Economic recession; Global; Middle East and Central Asia; Caribbean; Sub-Saharan Africa; South America
Cover IMF Staff Country Reports
Republic of Lithuania: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues paper investigates skills mismatch and active labor market policy in Lithuania. Wage flexibility is underpinned by one of the lowest densities of trade union and employer organization and the rare occurrence of collective bargaining. Thus, wage setting largely happens at the firm level. Real wages and productivity have been traditionally closely linked and temporary deviations have been self-correcting. In contrast, structural unemployment has been traditionally high, although it appears to be gradually falling. Large structural unemployment can have a significant long-term impact on potential growth and, therefore, on employment. Lithuania suffers from relative labor shortage for high-skilled workers and surplus of low- and medium-skilled workers. Thus, there are labor shortages in skill-intensive sectors. Lithuania has shown a sharp rise in skills mismatch for the country in the aftermath of the crisis. Vacancy rates and wage growth by sectors also suggest an excess supply of lower skilled workers and shortage of high-skilled ones.
Keywords:
ISCR; CR; Lithuania; interest rate gap; transmission mechanism; statistics Lithuania; wage growth; The Market; open economy; Labor markets; Active labor market policies; Output gap; Unemployment; Global; Europe; Eastern Europe; Western Europe
Cover IMF Working Papers
A Closed Form Multivariate Linear Filter
Mr. Francis Vitek
This paper considers the problem of jointly decomposing a set of time series variables into cyclical and trend components, subject to sets of stochastic linear restrictions among these cyclical and trend components. We derive a closed form solution to an ordinary problem featuring homogeneous penalty term difference orders and static restrictions, as well as to a generalized problem featuring heterogeneous penalty term difference orders and dynamic restrictions. We use our Generalized Multivariate Linear Filter to jointly estimate potential output, the natural rate of unemployment and the natural rate of interest, conditional on selected equilibrium conditions from a calibrated New Keynesian model.
Keywords:
WP; Closed form; Multivariate linear filter; New Keynesian model; Potential output; Natural rate of unemployment; Natural rate of interest; gap estimate; objective function; estimates to parameter perturbation; parameter estimate; maximization problem; inflation gap estimate; equilibrium value; interest rate gap; estimation Results; Unemployment rate; Output gap; Central bank policy rate; Neoclassical theory; Global
Cover IMF Staff Country Reports
Austria: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Austria
International Monetary Fund. European Dept.
This 2018 Article IV Consultation highlights that Austria’s economic recovery is strong and broad-based. Following several years of slow growth, Austria’s output picked up markedly in 2017, and through early-2018. Output expanded by 3 percent in 2017, boosted by income tax cuts passed in 2016, higher public spending on refugees and a recovery in private investment in 2017, laying the foundation for a sustained robust expansion. Consumer and business confidence indicators have surpassed levels observed before the Global Financial Crisis and credit growth has recovered. The near-term outlook is for strong growth in 2018, at 3 percent, and a gradual return to a potential growth of about 1.75 percent over the medium-term.
Keywords:
ISCR; CR; discussion; authority; consultation discussion; cost reduction; house price development; consumer confidence; employment growth; economic policy discourse; cost pressure; Austrian authorities; lending standard; Labor markets; Loans; Fiscal stance; Unemployment; Europe; Central and Eastern Europe
Cover IMF Working Papers
A Macroeconomic Approach to the Term Premium
Emanuel Kopp
and
Peter D. Williams
In recent years, term premia have been very low and sometimes even negative. Now, with the United States economy growing above potential, inflationary pressures are on the rise. Term premia are very sensitive to the expected future path of growth, inflation, and monetary policy, and an inflation surprise could require monetary policy to tighten faster than anticipated, inducing to a sudden decompression of term and other risk premia, thus tightening financial conditions. This paper proposes a semi-structural dynamic term structure model augmented with macroeconomic factors to include cyclical dynamics with a focus on medium- to long-run forecasts. Our results clearly show that a macroeconomic approach is warranted: While term premium estimates are in line with those from other studies, we provide (i) plausible, stable estimates of expected long-term interest rates and (ii) forecasts of short- and long-term interest rates as well as cyclical macroeconomic variables that are stunningly close to those generated from large-scale macroeconomic models.
Keywords:
WP; term structure of interest rates; term premium; yield curve; State Space; inflation expectation; New York Fed conduct; risk-free rate; core PCE inflation series; interest rate forecast; interest rate expectation; hike cycle; inflation variable; Inflation; Short term interest rates; Bonds; Unemployment
Cover IMF Staff Country Reports
Cyprus: Second Post-Program Monitoring Discussions-Press Release; Staff Report and Statement by the Executive Director for Cyprus
International Monetary Fund. European Dept.
This paper discusses Cyprus’ Second Post-Program Monitoring Discussions. Cyprus’s economic recovery has strengthened. GDP growth has reached 3.9 percent in 2017, with upbeat activity concentrated in construction, tourism and professional services. The unemployment rate has continued to decline at a sustained pace, while moderate price and wage rises have supported competitiveness, helping to contain the increase in the current account deficit, despite higher imports. Improved economic conditions have supported robust fiscal revenue collection, contributing to a sizable primary surplus and a decline in the public debt ratio. The current strong expansion is forecast to extend well into the future, with growth inching up to 4 percent in 2018 and 4.2 percent in 2019.
Keywords:
ISCR; CR; authority; Cyprus; policy; IMF staff estimate; growth momentum; public debt debt ratio; debt to GDP ratio; policy of wage; construction project; Nonperforming loans; Loans; Credit; Special purpose vehicle; Global
Cover IMF Working Papers
Measuring Global and Country-Specific Uncertainty
Ezgi O. Ozturk
and
Xuguang Simon Sheng
Motivated by the literature on the capital asset pricing model, we decompose the uncertainty of a typical forecaster into common and idiosyncratic uncertainty. Using individual survey data from the Consensus Forecasts over the period of 1989-2014, we develop monthly measures of macroeconomic uncertainty covering 45 countries and construct a measure of global uncertainty as the weighted average of country-specific uncertainties. Our measure captures perceived uncertainty of market participants and derives from two components that are shown to exhibit strikingly different behavior. Common uncertainty shocks produce the large and persistent negative response in real economic activity, whereas the contributions of idiosyncratic uncertainty shocks are negligible.
Keywords:
WP; interest rate; economic policy; standard deviation; Capital Asset Pricing Model; Common Uncertainty; Consensus Forecasts; Idiosyncratic Uncertainty; Global Uncertainty; Survey Forecast; recession episode; VSU estimate; uncertainty shock; uncertainty measure; return volatility; Industrial production; Short term interest rates; Long term interest rates; Unemployment rate; Consumption; Global
Cover IMF Working Papers
Market Reforms at the Zero Lower Bound
Matteo Cacciatore
,
Mr. Romain A Duval
,
Giuseppe Fiori
, and
Mr. Fabio Ghironi
This paper studies the impact of product and labor market reforms when the economy faces major slack and a binding constraint on monetary policy easing. such as the zero lower bound. To this end, we build a two-country model with endogenous producer entry, labor market frictions, and nominal rigidities. We find that while the effect of market reforms depends on the cyclical conditions under which they are implemented, the zero lower bound itself does not appear to matter. In fact, when carried out in a recession, the impact of reforms is typically stronger when the zero lower bound is binding. The reason is that reforms are inflationary in our structural model (or they have no noticeable deflationary effects). Thus, contrary to the implications of reduced-form modeling of product and labor market reforms as exogenous reductions in price and wage markups, our analysis shows that there is no simple across-the-board relationship between market reforms and the behavior of real marginal costs. This significantly alters the consequences of the zero (or any effective) lower bound on policy rates.
Keywords:
WP; product market; Employment protection; Monetary policy; Producer entry; Product market regulation; Structural reforms; Unemployment benefits; Zero lower bound; product market deregulation; present discounted value; nominal interest rate; physical capital; product market reform; labor market dynamics; Consumption; Commodity markets; Labor productivity; Global
Cover IMF Staff Country Reports
Botswana: Selected Issues
International Monetary Fund. African Dept.
This Selected Issues paper examines the stability of the financial sector in Botswana. The financial system has grown rapidly over the years, but there is still substantial scope for expansion. Banks, institutional investors, and the Botswana Stock Exchange have grown steadily over the years based on political and economic stability, savings from diamond exports, and fiscal surpluses. Botswana’s financial stability framework could benefit from upgrading. Data gaps and incomplete information on cross-border capital flows and growing interconnection with the nonbank financial sector may entail risks. In this regard, close cooperation among regulators and proper assessment of macro-financial risks associated with banks’ large exposures will contribute to more effective financial system supervision.
Keywords:
ISCR; CR; banks assets; bank; Botswana; rate; VAT; income inequality Gini index; unemployment challenge; bank lender; financial system supervision; South Africa underground; Value-added tax; Income and capital gains taxes; Personal income tax; Tax administration core functions; Africa; Sub-Saharan Africa; Global