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Business and Economics > Production and Operations Management

You are looking at 1 - 10 of 11 items for :

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Cover IMF Working Papers
China’s Path to Sustainable and Balanced Growth
Dirk V Muir
,
Natalija Novta
, and
Anne Oeking
After decades of high growth, the Chinese economy is facing headwinds from slowing productivity growth and a declining workforce that are projected to lower potential growth substantially in the longer term. We project China’s potential growth over the medium to long term, showing that potential growth could slow to around 3.8 percent on average between 2025-30 and to around 2.8 percent on average over 2031-40 in the absence of major reforms. We present a reform scenario with structural reforms to lift productivity growth and rebalancing China’s growth towards more consumption, that would help China transition to “high-quality”—balanced, inclusive, and green—growth. We use production function and general equilibrium modelling approaches to show that potential growth could remain at around 4.3 percent between 2025-40 under the reform scenario.
Keywords:
Potential growth; investment-led growth; rebalancing; demographic trends; structural reforms; reform scenario; General equilibrium modeling approach; reforming China's economy; tertiary sector; SOE productivity gap; Total factor productivity; Productivity; Consumption; Global value chains; Global; Southeast Asia
Cover Selected Issues Papers
Spillovers from China’s Growth Slowdown to the Singapore Economy: Singapore
Kodjovi M. Eklou
,
Shujaat Khan
, and
Margaux MacDonald
This paper examines the impact of China's economic deceleration on Singapore, highlighting how the deepening trade integration and China's pivotal role in Global Value Chains (GVCs) amplify these spillover effects. Utilizing multi-region input-output tables, empirical estimates, and the IMF's Global Integrated Monetary and Fiscal model, it identifies significant sectoral and aggregate impacts, particularly in electrical and machinery manufacturing, petrochemicals, and financial services. The analysis underscores the vulnerability of Singapore's economy to shifts in Chinese demand and productivity, emphasizing the need for vigilant monitoring and strategic adaptation to mitigate potential risks associated with China's slowdown.
Keywords:
China; ASEAN; Growth Spillovers; Input-output table; Local projections; General equilibrium model; Global value chains; IMF China growth projection; China growth shock; Singapore economy; growth slowdown; growth shock; Spillovers; Exports; Productivity; Southeast Asia; Global; Asia and Pacific
Cover Selected Issues Papers
Structural Transitions to Electric Vehicle Production: Czech Republic
Stephen Ayerst
and
Neree C.G.M. Noumon
Sustaining the impressive convergence gains allowed by the Czech automotive sector has become challenging due to its comparatively lower value added, lower investments in research and development, and lower skills in the labor market. Using a structural model of global value chains, the paper examines policies to smooth the transition to the production of electric vehicles in Czechia. The analysis explores the impacts of increasing labor productivity, boosting production capabilities, and moving up the global value chain. These policies were found to have a relatively lower impact when they shift specialization towards lower value-added stages of production.
Keywords:
Automotive industry; Czech Republic; Convergence; Electric vehicles; Global value chains; Labor productivity; Structural Policy; electric vehicle production; production capability; model illustration; Czechia economy; Policy recommendation; Employment; Skilled labor; Global
Cover IMF Staff Country Reports
Czech Republic: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues paper examines—through the lenses of a structural model of global value chains—policies that could smooth the transition to the production of electric vehicles in Czechia economy context. In particular, the paper analyzes the impacts of a broad set of policies related to increasing labor productivity, boosting production capabilities in the current set of specialties, and moving up the global value chain. Czechia automotive sector’s value-added share and skill intensity are comparatively lower in the regional context. IMF analysis investigates the potential impact of a transition to electric vehicles in Europe, through a combination of data and modeling techniques. The paper also introduces a stylized structural model of automotive global value chains that includes distinct production of electric and combustion vehicles. The model describes the inter-connectedness of trade and imbeds domestic capability features, including specialization along the global value chain. The model is also calibrated to capture key features of Czechia and Germany’s positions in global value chains, as well as key differences between electric and combustion vehicle production.
Keywords:
electric vehicle production in Czechia; model illustration; Czechia economy; I. model description; consumers from Czechia; Global value chains; Labor productivity; Employment; Skilled labor; Global
Cover IMF Working Papers
Global Value Chains and Productivity: Micro Evidence from Estonia
Hang T. Banh
,
Mr. Philippe Wingender
, and
Cheikh A. Gueye
The COVID-19 pandemic has led to an unprecedented collapse in global economic activity and trade. The crisis has also highlighted the role played by global value chains (GVC), with countries facing shortages of components vital to everything from health systems to everyday household goods. Despite the vulnerabilities associated with increased interconnectedness, GVCs have also contributed to increasing productivity and long-term growth. We explore empirically the impact of GVC participation on productivity in Estonia using firm-level data from 2000 to 2016. We find that higher GVC participation at the industry level significantly boosts productivity at both the industry and the firm level. Frontier firms, large firms, and exporting firms also benefit more from GVC participation than non-frontier firms, small firms, and non-exporting firms. We also find that GVC participation of downstream industries has a negative correlation with productivity. Frontier firms and large firms benefit more from GVC participation of upstream industries, while non-frontier firms and small firms benefit more from GVC participation of downstream industries. Our results suggest that policies designed to promote participation in GVCs are important to raise aggregate productivity and potential growth in Estonia.
Keywords:
WP; GVC participation; production function; export firm; global value chains; trade; productivity; industry level; industry productivity growth; GVC supplier; participation measure; firm level; dependent variable; capital intensity; GVC buyer; Exports; Industrial productivity; Labor productivity; Global
Cover IMF Working Papers
Productivity Growth and Value Chains in Four European Countries
Ms. Izabela Karpowicz
and
Mrs. Nujin Suphaphiphat
Advanced economies have been witnessing a pronounced slowdown of productivity growth since the global financial crisis that is accompanied in recent years by a withdrawal from trade integration processes. We study the determinants of productivity slowdown over the past two decades in four closely integrated European countries, Austria, Denmark, Germany and the Netherlands, based on firm-level data. Participation in global value chains appears to have affected productivity positively, including through its effect on TFP when facilitated by higher investment in intangible assets, a proxy for firm innovation. Other contributors to productivity growth in firms are workforce aging, access to finance, and skills mismatches.
Keywords:
WP; firm; global value chain; increase productivity; firm Innovation proxy; productivity dynamics; data availability; firm level; Labor productivity; Productivity; Total factor productivity; Capital productivity; Global value chains; Global; Europe; firms; GVC
Cover IMF Working Papers
Is Digitalization Driving Domestic Inflation?
Mr. Balazs Csonto
,
Yuxuan Huang
, and
Mr. Camilo E Tovar Mora
This paper examines the extent to which digitalization—measured by a new proxy based on IP addresses allocations per country—has influenced inflation dynamics in a sample of 36 advanced and emerging economies over 2000-2017. Phillips curve estimates show that digitalization has a statistically significant negative effect on inflation in the short run. Its economic impact is not large but has increased since 2012 and mainly operates through a cost/competition channel. Principal components and cointegration analysis further suggest digitalization is a key driver of lower trend inflation.
Keywords:
WP; Phillips curve; Inflation; Digitalization; IP Address; Internet; inflation expectation; inflation dynamics; food inflation; inflation trend; inflation variation; trend inflation; inflation gap; Global value chains; Digital economy; Output gap; Global
Cover IMF Working Papers
Globalization, Market Power, and the Natural Interest Rate
Jean-Marc Natal
and
Nicolas Stoffels
We argue that strong globalization forces have been an important determinant of global real interest rates over the last five decades, as they have been key drivers of changes in the natural real interest rate—i.e. the interest rate consistent with output at its potential and constant inflation. An important implication of our analysis is that increased competition in goods and labor market since the 1970s can help explain both the large increase in real interest rates up to the mid-1980s and—as globalization forces mature and may even go into reverse, leading to incrementally rising market power—its subsequent and protracted decline accompanied by lower inflation. The analysis has important implications for monetary policy and the optimal pace of normalization.
Keywords:
WP; low interest rate puzzle; globalization; natural interest rate; real interest rates; markups; globalization premium; reaction function; price markup; globalization process; goods market; Long term interest rates; Labor markets; Productivity; Global
Cover IMF Working Papers
Assessing Competitiveness Using Industry Unit Labor Costs: An Application to Slovakia
International Monetary Fund
Conceptual ambiguities and statistical weaknesses hamper the assessment of external competitiveness. The term competitiveness, while applied extensively, is often imprecisely defined, which can result in analytical errors and mistaken policy advice. Furthermore, aggregate statistical measures of competitiveness in terms of exchange rate misalignment can be biased. To address these issues, this paper makes two contributions. First, it clarifies the external competitiveness concept, highlighting the dichotomy between productivity-driven long-run growth and short-run deviations from the underlying growth trajectory, which can be related to exchange rate misalignment. Second, it develops a disaggregated statistical approach for examining competitiveness based on unit labor costs at the three digit industry level in a group of comparable countries. The case of Slovakia is used to illustrate these concepts, but the analytical insights have general application.
Keywords:
WP; Slovakia; cost; export share; competitiveness; unit labor cost; exchange rate; price level; paper estimates unit labor cost norm; disaggregated ULC; ULC dev.; industry unit labor cost; ULC relative; Competition; Exchange rates; Productivity; Global competitiveness; Export performance; Global
Cover Challenges of Growth and Globalization in the Middle East and North Africa
Challenges of Growth and Globalization in the Middle East and North Africa
Mr. George T. Abed
and
Mr. Hamid R Davoodi

Abstract

The Middle East and North Africa (MENA) is an economically diverse region. Despite undertaking economic reforms in many countries, and having considerable success in avoiding crises and achieving macroeconomic stability, the region’s economic performance in the past 30 years has been below potential. This paper takes stock of the region’s relatively weak performance, explores the reasons for this out come, and proposes an agenda for urgent reforms.

Keywords:
MISC PUBS; Misc.; country; MENA region; MENA country; oil exporter; privatization receipt; oil-producing country; MENA oil country; MENA countries' experience; a number of country; Public sector; Total factor productivity; Population growth; Labor force; Global; East Asia; Middle East; North Africa; East Africa