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Business and Economics > Finance: General

You are looking at 1 - 10 of 22 items for :

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Cover IMF Working Papers
Market Power in the Middle East
Yevgeniya Korniyenko
,
Ahmed K Tohamy
, and
Weining Xin
The Middle East (ME) is often perceived as region with rentier economies and uncompetitive markets. Evidence of market power in the region however is scant. In this paper, we ask the following three questions: Is the ME uniquely uncompetitive? Has the evolution of market power in the region traced the global rise in market power? What government policies and actions influenced the market power in the region and can taxes be a way to even the playing field? To answer these questions, we utilize comprehensive firm-level data from Compustat between 2004 and 2022 and employ two methods for estimating markups (production function and cost-share approach). We document that market power among listed firms in the ME is higher than in the US, but on a downward trend. We find that the value-added tax (VAT) reforms introduced by some Gulf states from 2018 to 2022 resulted in a reduction of market power, an additional benefit beyond increasing fiscal space. While policymakers should continue to use available regulatory levers to achieve economic efficiency and a level playing field, VAT could be considered as an alternative instrument.
Keywords:
Middle East; Market Power; Markup; Firm Behavior; market power in the Middle East; markups estimate; sample representativeness; markups in GCC country; markups dynamics; Value-added tax; Competition; Inflation; Oil sector; Global
Cover IMF Working Papers
Following the Money: Who is Keeping Coal Alive?
Gregor Schwerhoff
and
Mouhamadou Sy
The 2023 United Nations Climate Change Conference reinforced already existing pressure to transition away from fossil fuels, in particular for the most polluting source, coal. We use a comprehensive dataset on bank loans for coal projects to shed light on which type of banks continue to finance coal and how coal phase-out commitments affect coal financing. We find that coal financing is becoming increasingly concentrated, partly in banks with a very high coal exposure. We also find that many coal loans have maturities much shorter than the remaining lifetime of coal assets, thus exposing equity holders of coal assets to the risk of a more difficult loan rollover. An econometric analysis shows that countries with a strong commitment to coal phase-out, fixed in national law for example, receive less coal financing. Using an instrumental variable, we identify this effect as causal.
Keywords:
Coal; climate change; stranded assets; coal; divestment; United Nations climate change conference; Coal financing; phase-out commitment; coal financing; financing to the coal sector; Non-renewable resources; Financial sector development; Climate policy; Foreign direct investment; Asia and Pacific; Global; Europe; Middle East; Sub-Saharan Africa
Cover IMF Staff Country Reports
Botswana: 2024 Article IV Consultation-Press Release and Staff Report
International Monetary Fund. African Dept.
The 2024 Article IV Consultation discusses that Botswana’s economic growth is expected to slow to 1 percent in 2024 primarily because of a diamond market contraction, before picking up next year. Inflation has declined sharply since the peak of mid-2022 and returned to the central bank’s medium-term objective range of 3–6 percent, where it is expected to remain in the medium term. Some fiscal relaxation is warranted this year given the fall in mineral revenues, but the ambitious capital budget should be streamlined to contain the deterioration of the deficit and prioritize projects with the highest value for money. The monetary policy stance is appropriate, but monetary policy transmission remains limited, requiring further deepening of the interbank, credit, and government bond markets along the transmission chain. Reducing inequality and unemployment requires a more job-intensive, private sector-led, and export-oriented growth model. Reform of state-owned enterprises, improved infrastructure for doing business (internet, energy, and logistics), trade facilitation measures, and a more efficient social protection system should be prioritized.
Keywords:
IMF's article; OPEC Fund for International Development; project obligations to fund; objective range; diamond market contraction; IMF team; Non-renewable resources; Financial sector stability; Global; Southern Africa; Africa
Cover IMF Working Papers
Geoeconomic Fragmentation and Commodity Markets
Mr. Jorge A Alvarez
,
Mehdi Benatiya Andaloussi
,
Chiara Maggi
,
Alexandre Sollaci
,
Martin Stuermer
, and
Petia Topalova
This paper studies the economic impact of fragmentation of commodity trade. We assemble a novel dataset of production and bilateral trade flows of the 48 most important energy, mineral and agricultural commodities. We develop a partial equilibrium framework to assess which commodity markets are most vulnerable in the event of trade disruptions and the economic risks that they pose. We find that commodity trade fragmentation – which has accelerated since Russia’s invasion of Ukraine – could cause large price changes and price volatility for many commodities. Mineral markets critical for the clean energy transition and selected agricultural commodity markets appear among the most vulnerable in the hypothetical segmentation of the world into two geopolitical blocs examined in the paper. Trade disruptions result in heterogeneous impacts on economic surplus across countries. However, due to offsetting effects across commodity producing and consuming countries, surplus losses appear modest at the global level.
Keywords:
Commodities; international trade; sanctions; spillovers; prices; geoeconomic fragmentation; trade disruption; price change; commodity producer; net-commodity-importing country; trade fragmentation; Commodity markets; Commodity price fluctuations; Agricultural commodities; Inflation; Global
Cover IMF Working Papers
Decomposing Climate Risks in Stock Markets
Yuanchen Yang
,
Chengyu Huang
, and
Yuchen Zhang
Climate change poses an unprecedented challenge to the world economy and the global financial system. This paper sets out to understand and quantify the impact of climate mitigation, with a focus on climate-related news, which represents an important information source that investors use to revise their subjective assessments of climate risks. Using full-text data from Financial Times from January 2005 to March 2022, we develop machine learning-based indicators to measure risks from climate mitigation, and the direction of the risk is identified through manual labels. The documented risk premium indicates that climate mitigation news has been partially priced in the Canadian stock market. More specifically, stock prices react positively to market-wide climate-favorable news but they do not react negatively to climate-unfavorable news. The results are robust to different model specifications and across equity markets.
Keywords:
Climate Mitigation; Machine Learning; Asset Pricing; climate mitigation news; climate news factor; sorting strategy; EU stock market; climate news coverage; Climate change; Climate policy; Oil sector; Asset prices; Global
Cover Finance & Development
Finance & Development, December 2022: The Scramble for Energy
International Monetary Fund. Communications Department
Finance & Development, December 2022
Keywords:
energy transition; West Indies cricket team; fossil fuel use; energy consumption; West Indies cricket journey; Renewable energy; Fuel prices; Non-renewable resources; Energy prices; Electricity; Europe; Global; Caribbean; Africa; Baltics
Cover Staff Climate Notes
Mobilizing Private Climate Financing in Emerging Market and Developing Economies
Mr. Ananthakrishnan Prasad
,
Ms. Elena Loukoianova
,
Alan Xiaochen Feng
, and
William Oman
Global investment to achieve the Paris Agreement’s temperature and adaptation goals requires immediate actions—first and foremost—on climate policies. Policies should be accompanied by commensurate financing flows to close the large financing gap globally, and in emerging market and developing economies (EMDEs) in particular. This note discusses potential ways to mobilize domestic and foreign private sector capital in climate finance, as a complement to climate-related policies, by mitigating relevant risks and constraints through public-private partnerships involving multilateral, regional, and national development banks. It also overviews the role the IMF can play in the process.
Keywords:
climate finance; sustainable finance; climate change; sustainable development; financial policy; capital flows; IMF staff Climate note; IMF analysis; venture capital; private sector capital; climate investment; economic gain; public finance; adaptation investment; private sector investor; Bloomberg finance L.P.; investment project; equity capital; adaptation investment project; climate investment decision; Public sector; Non-renewable resources; Global
Cover World Economic Outlook, October 2020
World Economic Outlook, October 2020
A Long and Difficult Ascent
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:
pandemic; great locdown; climate; climate mitigation; recession; COVID-19; WEO; commodity market development; IMF executive board discussion; debtor economy; lockdown measure; advanced economy
Cover World Economic Outlook, October 2020
World Economic Outlook, October 2020
A Long and Difficult Ascent
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:
pandemic; great locdown; climate; climate mitigation; recession; COVID-19; WEO; commodity market development; IMF executive board discussion; debtor economy; lockdown measure; advanced economy
Cover World Economic Outlook, October 2020
World Economic Outlook, October 2020
A Long and Difficult Ascent
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:
pandemic; great locdown; climate; climate mitigation; recession; COVID-19; WEO; commodity market development; IMF executive board discussion; debtor economy; lockdown measure; advanced economy