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Business and Economics > Finance: General

You are looking at 1 - 10 of 40 items for :

  • Type: Journal Issue x
  • Agriculture: Aggregate Supply and Demand Analysis; Prices x
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Cover IMF Working Papers
Spillovers from Large Emerging Economies: How Dominant Is China?
Hany Abdel-Latif
and
Adina Popescu
This paper investigates the global economic spillovers emanating from G20 emerging markets (G20-EMs), with a particular emphasis on the comparative influence of China. Employing a Bayesian Global Vector Autoregression (GVAR) model, we assess the impacts of both demand-side and supply-side shocks across 63 countries, capturing the nuanced dynamics of global economic interactions. Our findings reveal that China's contribution to global economic spillovers significantly overshadows that of other G20-EMs. Specifically, China's domestic shocks have significantly larger and more pervasive spillover effects on global GDP, inflation and commodity prices compared to shocks from other G20-EMs. In contrast, spillovers from other G20-EMs are more regionally contained with modest global impacts. The study underscores China's outsized role in shaping global economic dynamics and the limited capacity of other G20-EMs to mitigate any potential negative implications from China's economic slowdown in the near term.
Keywords:
Emerging Economies; Growth Spillover; Global transmission; GVAR model; outsized role; China's contribution; IMF working paper No. 25/27; domestic shock; Spillovers; Supply shocks; Emerging and frontier financial markets; Oil prices; Global value chains; Global
Cover IMF Working Papers
Industrial Policy in Europe: A Single Market Perspective
Andrew Hodge
,
Roberto Piazza
,
Fuad Hasanov
,
Xun Li
,
Maryam Vaziri
,
Atticus Weller
, and
Yu Ching Wong
European countries are increasingly turning to industrial policy to address the challenge of geopolitical fragmentation, enhance productivity, and accelerate the green transition. Well-targeted industrial policy has the potential to correct market failures and support production efficiency by exploiting scale effects and internalizing knowledge externalities. But even the most carefully designed unilateral industrial policies risk generating negative production externalities in other countries, and, under certain conditions, may not even be welfare-enhancing for the implementing country. The reason is that negative externalities of unilateral industrial policy can drive European and international production patterns away from underlying comparative advantages, create regional or global over-supply, and result in changes in terms of trade that reduce domestic welfare. This suggests significant benefits from coordination. Structural modeling and case studies show that a coordinated approach within the European Union and with international trading partners on a narrowly defined and carefully designed set of industrial policies could unlock untapped benefits. Closer European integration would facilitate the adjustment of firms and workers to coordinated and well-targeted industrial policies and amplify their benefits.
Keywords:
Industrial policy; European Single Market; State Aid; EU aerospace industry export; EU single market; fishery block exemption regulation; State aid expenditure; single market perspective; Comparative advantage; Demand elasticity; Competition; Terms of trade; Europe; Global
Cover IMF Working Papers
The Power of Prices: How Fast Do Commodity Markets Adjust to Shocks?
Christian Bogmans
,
Andrea Pescatori
,
Ivan Petrella
,
Ervin Prifti
, and
Martin Stuermer
This paper establishes supply and demand elasticities for a broad set of commodities based on a consistent dataset and identification methodology. We apply granular IV methods to a new cross-country panel dataset of commodity production and consumption from 1960-2021. The results indicate that commodity demand and supply are typically price inelastic. Demand and supply tend to be the most inelastic for minerals, whereas they are most elastic for agricultural commodities. The elasticities of energy commodities fall somewhere in between. Supply and demand become more elastic at longer time horizons for mineral and energy commodities, but not for most agricultural commodities.
Keywords:
Commodities; international trade; price elasticities; demand; supply; energy; agriculture; minerals; metals.; commodity demand and supply; energy commodity; supply and demand elasticity; commodity demand and supply elastities; mineral commodity; Agricultural commodities; Demand elasticity; Supply elasticity; Consumption; Global
Cover IMF Staff Country Reports
Namibia: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Namibia
International Monetary Fund. African Dept.
Namibia has been severely hit by the COVID-19 pandemic but has started to gradually recover. After a sharp contraction in 2020, with worsening fiscal imbalances and socio-economic disparities, a modest recovery began in 2021 and strengthened in the first half of 2022. Mining activity rebounded while manufacturing and tertiary sector activities gradually started to recover. Inflationary pressures have increased, as higher international oil and food prices due to Russia’s war in Ukraine were passed-through. The political context remains stable, with elections scheduled in 2024.
Keywords:
targeted reform agenda; authorities project SACU revenue; transparency policy; tertiary sector; FAD TA; IMF team; Fiscal consolidation; Food prices; Global; Africa
Cover IMF Staff Country Reports
Guatemala: Selected Issues
International Monetary Fund. Western Hemisphere Dept.
Selected Issues
Keywords:
export development; income quintile; export complexity; export determinant; International Monetary Fund Washington, d.c; Exports; Inflation; Food prices; Export performance; Consumer price indexes; Global; Central America; East Asia; North America; Caribbean
Cover IMF Working Papers
Macroeconomic Effects of Market Structure Distortions: Evidence from French Cartels
Flavien Moreau
and
Ludovic Panon
We provide systematic evidence on cartels’ characteristics, using novel data on cases investigated by the French Competition Authority. These practices are widely spread across sectors and cartel members are typically among the top firms in their industries. In a model with heterogeneous firms and collusion, cartels amplify misallocation by charging supracompetitive markups. Breaking down French cartels would increase aggregate productivity by 2%, welfare by 3.5%, bringing the economy 37% closer to the efficient frontier. These numbers shed light on the aggregate importance of collusion.
Keywords:
Competition; cartels; collusion; welfare; misallocation; cartel member; market structure distortion; characteristics of cartel; systematic evidence; markup dispersion; Productivity; Demand elasticity; Total factor productivity; Inflation; Europe; Global
Cover Regional Economic Outlook, April 2022, Middle East and Central Asia
Regional Economic Outlook, April 2022, Middle East and Central Asia
International Monetary Fund. Middle East and Central Asia Dept.

Abstract

The war in Ukraine and sanctions on Russia are exacerbating the divergence in recovery prospects for the Middle East and Central Asia (ME&CA). Despite better-than-expected upside momentum in 2021, the economic environment in 2022 is defined by extraordinary headwinds and uncertainties, particularly for commodity importers, with higher and more volatile commodity prices, rising inflationary pressures, faster-than-expected monetary policy normalization in advanced economies, and a lingering pandemic. Prospects for oil exporters in the Middle East and North Africa (MENA) region have improved, while countries in the Caucasus and Central Asia (CCA) region face a particularly challenging outlook given their linkages to Russia and Ukraine. Downside risks dominate the outlook and include a prolonged war and further sanctions on Russia, tighter-than-expected global financial conditions, possible deanchoring of inflation expectations, a sharper slowdown in China, and new pandemic outbreaks. Policymaking has become increasingly complex, with dwindling macro policy space to deal with these extraordinary shocks, amid high debt and inflation. Given divergent outlooks, policies will need to be calibrated carefully to country circumstances to manage uncertainties, maintain macroeconomic stability, and support the recovery while protecting the most vulnerable and ensuring food and energy security. Structural reforms have become even more urgent to prevent scarring from the pandemic and the war, and ensure a private sector-led and inclusive recovery, including by embracing digitalization and investing in a greener future.

Keywords:
inflation expectation; portfolio inflow; inflation dynamics; CCA country; country abbreviation; Inflation; Oil exports; Current account balance; Fiscal stance; Food prices; Global; Middle East and Central Asia; Central Asia and the Caucasus; Middle East; North Africa
Cover IMF Working Papers
India’s Inflation Process Before and After Flexible Inflation Targeting
Patrick Blagrave
and
Weicheng Lian
We study the inflation process in India, focusing on the periods before and after the adoption of flexible inflation-forecast targeting (FIT) in India. Our analysis uses several approaches including standard Phillips curve estimation for headline and core inflation, an examination of the sensitivity of medium-term inflation expectations to inflation surprises, and the properties of convergence between headline and core inflation. Results indicate an important role for domestic factors in driving the inflation process, and there is evidence that expectations have become more anchored since 2015. This result could be attributable to FIT adoption, or to persistently low food prices which dominate the post-FIT-adoption period. The policy implications of these structural changes in the inflation process are investigated using a semi-structural model calibrated to the Indian economy.
Keywords:
India; WP; inflation expectation; headline inflation processes; food price inflation; core-inflation process; core-inflation determinant; headline inflation forecast; Inflation targeting; Inflation; Food prices; Emerging and frontier financial markets; Import prices; Global
Cover IMF Working Papers
Internal Capital Markets in Business Groups and the Propagation of Credit Supply Shocks
Ms. Yu Shi
,
Robert M. Townsend
, and
Wu Zhu
Using business registry data from China, we show that internal capital markets in business groups can propagate corporate shareholders’ credit supply shocks to their subsidiaries. An average of 16.7% local bank credit growth where corporate shareholders are located would increase subsidiaries investment by 1% of their tangible fixed asset value, which accounts for 71% (7%) of the median (average) investment rate among these firms. We argue that equity exchanges is one channel through which corporate shareholders transmit bank credit supply shocks to the subsidiaries and provide empirical evidence to support the channel.
Keywords:
WP; subsidiary firm; trade credit; bank financing condition; profit margin; Internal capital markets; business groups; bank lending; China; credit supply shocks; business group; Credit; Supply shocks; Bank credit; Stocks; Asset valuation
Cover IMF Working Papers
Credit Supply and Productivity Growth
Francesco Manaresi
and
Mr. Nicola Pierri
We study the impact of bank credit on firm productivity. We exploit a matched firm-bank database covering all the credit relationships of Italian corporations, together with a natural experiment, to measure idiosyncratic supply-side shocks to credit availability and to estimate a production model augmented with financial frictions. We find that a contraction in credit supply causes a reduction of firm TFP growth and also harms IT-adoption, innovation, exporting, and adoption of superior management practices, while a credit expansion has limited impact. Quantitatively, the credit contraction between 2007 and 2009 accounts for about a quarter of observed the decline in TFP.
Keywords:
WP; supply shock; credit supply; interbank market; capital stock; Productivity; Export; Management; IT adoption; productivity dynamics; firm TFP; credit crunch; borrowing firm; policy function; input acquisition; relation characteristic; firm information; firm balance-sheets; output price; productivity effect; Credit; Supply shocks; Bank credit; Interbank markets