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Business and Economics > Finance: General

You are looking at 1 - 10 of 34 items for :

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Cover IMF Staff Country Reports
Spain: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Spain
International Monetary Fund. European Dept.
This 2022 Article IV Consultation highlights that economic activity in Spain has remained resilient despite the new headwinds posed by the fallout of Russia’s invasion of Ukraine. Strong rebound in tourism and other services have supported growth this year. Policies to mitigate the surge in energy costs should shift to more targeted income support to the vulnerable, allowing price signals to incentivize demand and supply adjustments, while containing fiscal costs. The deterioration of the macroeconomic outlook and the rise in interest rates will likely erode borrowers’ repayment capacity. Banks need to maintain prudent levels of forward-looking provisions and should be encouraged to use capital buffers in case downside risks materialize. Spain is making progress on its ambitious reform agenda and the execution of investments under the Recovery, Transformation and Resilience Plan. Establishing a system of regular, data-driven, outcome-based evaluation of the reforms’ effectiveness will be important to ensure that they achieve the desired outcomes.
Keywords:
December CPI flash estimate; vis nonresident; headline CPI; staff report projection; money market rate; Inflation; Energy prices; Labor markets; Labor market reforms; Income; Global; Europe
Cover IMF Working Papers
Labor and Product Market Reforms and External Imbalances: Evidence from Advanced Economies
Mr. Romain A Duval
,
Davide Furceri
, and
João Tovar Jalles
We explore the impact of major labor and product market reforms on current account dynamics using a new “narrative” database of major changes in employment protection for regular workers and product market regulation for non-manufacturing industries covering 26 advanced economies over the past four decades. Our main finding is that product market deregulation is associated with a weakening of the current account, while labor market deregulation is associated with an improvement. These effects are transitory and driven by both saving and investment responses. Labor and product market reforms both have a more positive impact on the current account balance when implemented under weak macroeconomic conditions. Our results are broadly consistent with predictions from recent DSGE models with endogenous producer entry and labor market frictions.
Keywords:
external imbalances; structural reforms; product market; labor market.; WP; product market deregulation; reform shock; product market reform; product market regulation; policy area
Cover IMF Working Papers
Post-Covid-19 Recovery and Resilience: Leveraging Reforms for Growth and Inclusion in Sub-Saharan Africa
Mrs. Paola Ganum
and
Mr. Vimal V Thakoor
Covid-19 has exacerbated economic and social vulnerabilities across Sub-Saharan Africa (SSA). There is a risk that growth could be lower for longer, with a setback to development. Post-pandemic reforms thus become even more important, especially with constrained scope for fiscal and monetary stimuli. Reforms could boost per capita growth by an additional 0.3-1.3 percentage points, relative to the 1.9 percent average since 2010. Such growth would reduce per capita income doubling time from 37 years to about 22 years. Low-income countries stand to gain the most from reforms. The largest gains come from governance, products markets, and factor accumulation. Importantly, these reforms can be implemented in the post-pandemic environment characterized by weaker social and distributional outcomes.
Keywords:
COVID-19; Growth; Development; Political Economy; Sub-Saharan Africa.; WP; product market reform; labor market market index; demand management; per capita income; frontier country; governance reform; labor market indicator; labor market rigidity; product market efficiency; SSA countries' performance; SSA economy
Cover Staff Discussion Notes
Designing Labor Market Institutions in Emerging and Developing Economies: Evidence and Policy Options
Mr. Romain A Duval
and
Mr. Prakash Loungani
This paper discusses theoretical aspects and evidences related to designing labor market institutions in emerging market and developing economies. This note reviews the state of theory and evidence on the design of labor market institutions in a developing economy context and then reviews its consistency with actual labor market advice in a selected set of emerging and developing economies. The focus is mainly on three broad sets of institutions that matter for both workers’ protection and labor market efficiency: employment protection, unemployment insurance and social assistance, minimum wages and collective bargaining. Text mining techniques are used to identify IMF recommendations in these areas in Article IV Reports for 30 emerging and frontier economies over 2005–2016. This note has provided a critical review of the literature on the design of labor market institutions in emerging and developing market economies, and benchmarked the advice featured in IMF recommendations for 30 emerging market and frontier economies against the tentative conclusions from the literature.
Keywords:
SDN; collective bargaining; unemployment insurance; severance pay; developing economy; UI system; Labor Market Institutions; Employment Protection; Unemployment Benefits; Social Assistance; Cash Transfers; Minimum Wage; monopsony power; firm level; income group; Emerging and frontier financial markets; Minimum wages; Labor markets; Africa; risk pooling; wage inequality
Cover IMF Working Papers
Macroeconomic Effects of Japan’s Demographics: Can Structural Reforms Reverse Them?
Mariana Colacelli
and
Emilio Fernández Corugedo
Yes, partly. This paper studies the potential role of structural reforms in improving Japan’s outlook using the IMF’s Global Integrated Monetary and Fiscal Model (GIMF) with newly-added demographic features. Implementation of a not-fully-believed path of structural reforms can significantly offset the adverse effect of Japan’s demographic headwinds — a declining and ageing population — on real GDP (by about 15 percent in the next 40 years), but would not boost inflation or contribute substantially to stabilizing public debt. Alternatively, implementation of a fully-credible structural reform program can contribute significantly to stabilizing public debt because of the resulting increase in inflation towards the Bank of Japan’s target, while achieving the same positive long-run effects on real GDP. If no reforms are implemented, severe demographic headwinds are expected to reduce Japan’s real GDP by over 25 percent in the next 40 years.
Keywords:
WP; product market reform; duality reform; inflation prospect; A. labor market; IMF staff's calculation; labor market duality reform; Structural reforms; demographics; OLG models; Japan; Japan calibration; nominal interest rate; GDP effect; Labor market reforms; Accommodative monetary policy; Commodity markets; Northern Europe
Cover IMF Working Papers
Assessing the Impact of Structural Reforms Through a Supply-side Framework: The Case of Argentina
Ms. Lusine Lusinyan
The paper uses a supply-side framework based on a production function approach to assess the role of structural reforms in boosting long-term GDP growth in Argentina. The impact of product, labor, trade, and tax reforms on each supply-side channel—capital accumulation, labor utilization, and total factor productivity, proxied with an efficiency estimate—is assessed separately and then combined to derive the total impact on growth. The largest effect of structural reforms, involving regulatory changes that promote competition and facilitate flexible forms of employment, comes through the productivity/efficiency channel. Pro-competition regulation also improves labor utilization, while lower entry barriers and trade tariffs are important for capital accumulation. Structural reforms could have substantial effects on Argentina’s long-term GDP growth; for example, an ambitious reform effort to improve business regulatory environment would add 1–1½ percent to average annual growth of GDP.
Keywords:
WP; product market; Argentina; employment; product market reform; Economic growth; structural reforms; productivity; product market competition; labor market reforms; trade openness; employment rate; technical efficiency; labor market indicator; trade tariff; Total factor productivity; Commodity markets; Capital productivity; Australia and New Zealand
Cover IMF Working Papers
The Needle in the Haystack: What Drives Labor and Product Market Reforms in Advanced Countries?
Mr. Romain A Duval
,
Davide Furceri
, and
Jakob Miethe
The political economy literature has put forward a multitude of hypotheses regarding the drivers of structural reforms, but few, if any, empirically robust findings have emerged thus far. To make progress, we draw a parallel with model uncertainty in the growth literature and provide a new version of the Bayesian averaging of maximum likelihood estimates (BAMLE) technique tailored to binary logit models. Relying on a new database of major past labor and product market reforms in advanced countries, we test a large set of variables for robust correlation with reform in each area. We find widespread support for the crisis-induces-reform hypothesis. Outside pressure increases the likelihood of reform in certain areas: reforms are more likely when other countries also undertake them and when there is formal pressure to implement them. Other robust correlates are more specific to certain areas—for example, international pressure and political factors are most relevant for product market and job protection reforms, respectively.
Keywords:
WP; product market reform; business cycle; unemployment benefit; political economy; Structural reforms; labor market; product market; deregulation; employment protection; unemployment benefits; Bayesian averaging of maximum likelihood estimates; centralization gov.; EU country; government coalition; product market flexibility; party majority; political orientation; political system; left-of-center government; product market deregulation; government party majority; government vote share; Labor market reforms; Commodity markets; Public investment and public-private partnerships (PPP); Eastern Europe; Southern Europe
Cover IMF Working Papers
On the Impact of Structural Reforms on Output and Employment: Evidence from a Cross-country Firm-level Analysis
Luiza Antoun de Almeida
and
Vybhavi Balasundharam
This paper analyzes the effects of selected structural reforms on output and employment in the short and medium term. It uses a comprehensive cross-country firm-level dataset covering both advanced and emerging market economies over the period 2003-2014. In line with previous studies, it finds that structural reforms have in general a positive impact on output and employment in the medium term. Furthermore, the paper also assesses whether the impact of structural reforms varies with firm-specific characteristics, such as size, leverage, profitability, and sector. We find evidence that firm characteristics do influence the effectiveness of structural reforms. These findings have relevant policy implications as they help policymakers tailor the design of structural reforms to maximize their payoffs, taking into account their heterogeneous impact on firms.
Keywords:
WP; firm characteristic; panel dataset; leveraged firm; firms profit; structural reforms; firm-level data; Orbis dataset; potential growth; firms' output; Commodity markets; Labor market reforms; Production growth; Productivity; Global; Europe
Cover IMF Working Papers
A Narrative Database of Major Labor and Product Market Reforms in Advanced Economies
Mr. Romain A Duval
,
Davide Furceri
,
Bingjie Hu
,
João Tovar Jalles
, and
Huy Nguyen
This paper describes a new database of major labor and product market reforms covering 26 advanced economies over the period 1970-2013. The focus is on large changes in product market regulation in seven individual network industries, employment protection legislation for regular and temporary workers, and the replacement rate and duration of unemployment benefits. The main advantage of this dataset is the precise identification of the nature and date of major reforms, which is valuable in many empirical applications. By contrast, the dataset does not attempt to measure and compare policy settings across countries, and as such is no substitute for other publicly available indicators produced, for example, by the ILO, the OECD or the World Bank. It should also be seen as work in progress, for researchers to build on and improve upon. Based on the dataset, major reforms appear to have been more frequent in product markets than in labor markets in the last decades, and were predominantly implemented during the 1990s and 2000s.
Keywords:
WP; reform; product market; labor market; legislation; Regulation; Network Industries; Employment Protection; Unemployment insurance; product market reform; product market regulation; OECD indicator; reform database; regulation area; major reform; Commodity markets; Unemployment benefits; Labor market reforms; Labor markets; Southern Europe
Cover IMF Research Bulletin
IMF Research Bulletin, Summer 2017
International Monetary Fund. Research Dept.
The Summer 2017 issue of the IMF Research Bulletin highlights new research such as recent IMF Working Papers and Staff Discussion Notes. The Research Summaries are “Structural Reform Packages, Sequencing, and the Informal Economy (by Zsuzsa Munkacsi and Magnus Saxegaard) and “A Broken Social Contract, Not High Inequality Led to the Arab Spring” (by Shantayanan Devarajan and Elena Ianchovichina). The Q&A section features “Seven Questions on Fintech” (by Tommaso Mancini-Griffoli). The Bulletin also includes information on recommended titles from IMF Publications and the latest articles from the IMF Economic Review.
Keywords:
IRB; product market reform; research journal; journal of the International Monetary Fund; capital account regulation; IMF liquidity provision facilities; appendix I. Labor; Income inequality; Structural reforms; Fintech; Labor market reforms; Global; Caribbean; Middle East; North Africa; East Africa; Africa