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Business and Economics > Production and Operations Management

You are looking at 1 - 10 of 118 items for :

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Cover IMF Working Papers
Quarterly Projection Model for the Bank of Ghana: Extensions and Applications
Philip Abradu-Otoo
,
Joseph K. Acquah
,
James Attuquaye
,
Simon Harvey
,
Francis Loloh
,
Shalva Mkhatrishvili
,
Valeriu Nalban
,
Daniel Ngoh
,
Victor Osei
, and
Michael Quansah
The paper documents the latest extensions of the Bank of Ghana’s Quarterly Projection Model (QPM), used regularly to produce policy analysis and forecasts in support of the Bank’s policy processes. The decomposition of GDP allows to separate the agriculture and oil sectors, driven by exogenous and international developments, from non-agriculture non-oil activities, which are more relevant from the central bank’s perspective of assessing the business cycle position. Inter-sectoral price spillovers and their role in the formation of inflation expectations are explicitly accounted, with important policy implications. Specific model applications – including impulse response functions and simulations of shocks that affect agricultural production, e.g., those caused by climate disruptions; and counterfactual simulations to evaluate recent policy choices – highlight the usefulness of the extended QPM in providing a more detailed account of the economic developments, enhance forecast coverage, and broaden its underlying narrative, thus strengthening the BOG’s forward-looking policy framework.
Keywords:
Ghana; Forecasting and Policy Analysis; Quarterly Projection Model; Monetary Policy; Transmission Mechanism; A. impulse response; impulse response function; reaction function; policy analysis; Bank of Ghana's Quarterly Projection Model; price spillover; Inflation; Output gap; Inflation targeting; Real interest rates; Global
Cover Technical Assistance Reports
Ghana: Technical Assistance Report-Report on Developing the Forecasting and Policy Analysis System (FPAS) at the Bank of Ghana (BOG)
International Monetary Fund. Institute for Capacity Development
and
International Monetary Fund. African Dept.
This technical assistance (TA) report presents the outcomes of the multi-year Bank of Ghana (BOG) Forecasting and Policy Analysis System (FPAS) TA project, conducted between late-2019 and mid-2024 over a total of seven missions, three in-person and four virtual. The project has focused on upgrading and building new institutional capacity for model-based policy analysis and macroeconomic forecasting, along its integration into monetary policy processes and external communications. BOG staff has made remarkable progress and built a strong skillset in providing analytical support to the policymakers. Model-based work plays an important role in the BOG internal deliberations and represents the key input in forward-looking monetary policy formulation, including in regular external communications. Remaining recommendations relate to ensuring FPAS work sustainability and further streamline external communications.
Keywords:
Monetary policy; Inflation targeting; Central banks; Inflation; Output gap; Exchange rate; Monetary policy transmission; Ghana.; IMF TA project team; BOG forecasting team; TA team; BOG's Forecasting and Policy Analysis System; TA mission; Exchange rates; Agricultural sector; Global
Cover Selected Issues Papers
Lifting productivity in Oman: The Role of Structural Reforms
Muayad Ismail
and
Haytem Troug
Oman’s potential nonhydrocarbon real GDP growth has trended downward since the global financial crisis, with a negative contribution from total factor productivity. This paper estimates productivity gains associated with structural reforms and identifies key binding constraints and reform priorities to boost productivity in Oman. Our results show that reforms to reduce the state’s footprint and strengthen institutions, as well as product market reforms, should be prioritized and packaged together to magnify productivity gains from labor market and financial sector reforms. These findings could inform the planning and implementation of the ongoing structural reform agenda envisaged under Oman Vision 2040.
Keywords:
Economic diversification; productivity; Oman; structural reforms; productivity gain; Lifting productivity; hydrocarbon real GDP growth; reform priority; product market reform; Commodity markets; Labor markets; Total factor productivity; Global
Cover IMF Staff Country Reports
Luxembourg: 2024 Article IV Consultation-Press Release; and Staff Report; and Statement by the Executive Director for Luxembourg
International Monetary Fund. European Dept.
The 2024 Article IV Consultation discusses that Luxembourg’ economy contracted in 2023 despite buoyant consumption, mainly due to weak external demand and residential investment. Inflation is subsiding but underlying measures remain high. Credit growth turned negative as demand dropped and real estate prices declined. The newly elected government has approved a mix of temporary and permanent measures to support purchasing power and housing demand. Gradually easing financial conditions, continuing disinflation and expansionary fiscal policy is expected to help the economy rebound and the financial cycle bottom out. Inflation should decline in 2024, before temporarily increasing in 2025 once administrative price measures expire. The recovery is fragile amid heightened geopolitical tensions. Risks are tilted to the downside, stemming mainly from external demand/supply shocks and a disorderly correction of asset prices, including domestic real estate valuations. Sustained economic growth hinges on raising productivity, which has been stagnant since the Global Financial Crisis. Increasing investment in intangible assets, aligning workers’ skills with the current demands of the economy, reducing administrative burden, and making the wage indexation system more flexible will be key to harnessing productivity gains and bolstering competitiveness.
Keywords:
FATF report; Luxembourg economy; executive board assessment; headline inflation; labor productivity growth; Macroprudential policy; Productivity; Income; Financial Sector Assessment Program; Global
Cover IMF Staff Country Reports
Peru: Selected Issues
International Monetary Fund. Western Hemisphere Dept.
The Selected Issues paper focuses on productivity and growth in Peru. Firms have maintained smaller sizes to avoid the application of a profit-sharing legislation, which has resulted in lower productivity. After a decade of high economic growth averaging over 6 percent per year, potential growth has been falling since 2014. A much slower pace of investment and human has driven the decline capital accumulation, but most notably, a decline in total factor productivity growth. In line with the macroeconomic trends, firm-level productivity has worsened, and the decline has been broad-based across the economy. Special corporate tax regimes and labor legislations and regulations have created barriers to productivity growth. To raise productivity, policies will need to focus on reforming regulations that impose excessive costs to formalizing or growing a business. Down the line, introducing greater labor market flexibility would ensure that workers could transition to productive sectors of the economy and reduce labor informality.
Keywords:
El Niño shock; building RESILIENCE; B. Measuring productivity; B. artificial intelligence; total factor productivity growth; labor force complementarity; Climate change; Natural disasters; Productivity; Potential output; Artificial intelligence; Global; Caribbean
Cover Policy Papers
Development Committee: The Managing Director's Written Statement April 2024
International Monetary Fund. Strategy, Policy, & Review Department
The global economy has been resilient and appears headed for a soft landing. Inflation continues to recede and risks have become more balanced globally. Nonetheless, medium-term growth prospects remain at the lowest level in decades and a smooth completion of the disinflation process should not be taken for granted. While the outlook for low-income developing countries (LIDCs) is improving, risks are tilted to the downside. The pace of convergence toward higher living standards has slowed, making it increasingly challenging to achieve the Sustainable Development Goals (SDGs). In the last mile of disinflation, central banks should ensure that inflation moves durably to target: they should neither ease policies prematurely nor delay too long and risk causing target undershoot. Fiscal policies need to rebuild budgetary room and ensure debt sustainability. Fostering faster productivity growth and facilitating the green transition are keys to improving long-term growth prospects. Multilateral cooperation is key to enhancing the resilience of the global economy in a more shock-prone world.
Keywords:
inflation move; disinflation process; lending capacity; IMF surveillance; concessional facilities; Inflation; Climate finance; Climate change; Sustainable Development Goals (SDG); Disinflation; Global
Cover IMF Staff Country Reports
New Zealand: 2024 Article IV Consultation-Press Release; and Staff Report
International Monetary Fund. Asia and Pacific Dept
The 2024 Article IV Consultation discusses that New Zealand’s economic activity has slowed following monetary policy tightening and a decline in investment. Growth is expected to remain slow at 1 percent y/y in 2024 before picking up in 2025, as the lagged impact of monetary policy tightening suppresses domestic demand. Improving external conditions should help narrow the trade deficit, especially through tourism. Budget 2024 should deliver a tight fiscal stance in the near term and provide a comprehensive consolidation strategy for the medium term. Monetary policy is appropriately tight and should remain restrictive to ensure a timely return of inflation to target. Structural reforms are needed to boost the housing supply, revive productivity growth, lower emissions, and address challenges from climate change. The ongoing housing affordability challenges cannot be solved without a significant increase in residential construction. Policy recommendations include reforming land use restrictions, addressing local infrastructure funding needs, and using land value and capital gains taxes to incentivize more efficient land use.
Keywords:
monetary and financial statistics; FSAP mission; consultation cycle; FSAP participation; inflation expectation; Inflation; Labor markets; Productivity; Housing; Global
Cover IMF Staff Country Reports
Republic of Slovenia: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues paper focuses on boosting productivity in Slovenia. Slovenia’s ageing population sets a constraint on the contribution of labor to gross domestic product in the end.Only achieve sustained increases in income and living standards can, therefore, through investment in physical and human capital and, more importantly, through enhancing productivity, historically the key growth driver. This paper summarizes historical trends in growth and productivity in Slovenia, examines the country’s strengths and weaknesses in terms of key factors affecting productivity identified in the literature. Since the scope for future labor contributions to growth in Slovenia is limited for demographic reasons—apart from further improvements to labor quality—the focus of economic growth policies should be on reinvigorating private investment, which has been low over the past decade, and pursuing labor and product market reforms that boost total factor productivity growth.
Keywords:
productivity trend; firm leverage; labor market indicator; I. shift share methodology; EU growth composition; Productivity; Total factor productivity; Labor force; Private investment; Europe; Central and Eastern Europe; Global
Cover IMF Staff Country Reports
Colombia: Selected Issues
International Monetary Fund. Western Hemisphere Dept.
This Selected Issue paper discusses unpacking low productivity in Colombia and presents evidence from firm-level data in Colombia. Colombia’s Total Factor Productivity (TFP) has fallen and stagnated over the past three decades, although the factors behind this broad-based decline have differed across sectors. Using firm-level data, we show that while the mining TFP declines were dominated by lower within-firm productivity, in the case of manufacturing and agriculture positive reallocation effects played a buffering role. Across the board, the lack of entry of new productive firms contributes to missing TFP growth. Decomposition results show that the dynamics of TFP and their compositions are heterogeneous across sectors. Misallocation of factors of production appears to pose a sizable growth cost for Colombia, though progress in reducing misallocation has been made in recent years. It should be emphasized that the paper does not identify the causes of misallocation, which could be industry- and firm-specific bottlenecks, such as taxes, adverse incentives, access to financing, labor market rigidities, red tape, or policy uncertainty. Policies to improve misallocation could be derived from studies that explore the causes of misallocation and industry-specific problems. In general, such policies should be based on the principles of leveling the playing field, encouraging investment, and removing distortions.
Keywords:
current account ratio; fiscal policy change; C. fiscal policy adjustment; quality upgrade; TFP firm; Total factor productivity; Fiscal consolidation; Current account; Exports; Current account balance; Caribbean; East Asia; Global
Cover IMF Staff Country Reports
Slovak Republic: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues paper focuses on drivers and impacts of inflation in Slovakia. High and volatile inflation in Slovakia in recent years seems to be mainly driven by volatile food prices amplified by the larger consumer price index weight of food items. Other drivers include the large impact of imported inflation, elevated profit margins of domestic firms, and higher wage growth. High inflation could erode external competitiveness through higher unit labor costs, but there is no clear evidence of this so far. Domestically, high inflation has had uneven impacts across households and firms. Firms with the largest cost increases experienced a deterioration in their financial situation, and certain categories of households, including those with low-income levels and the elderly, are particularly vulnerable to the rising cost of living. The recent fall in inflation is projected to continue, but strong unit labor cost growth or an increase in profit margins could keep inflation elevated and undermine competitiveness.
Keywords:
price change; unit labor cost; inflation in Slovakia; B. income convergence; D. policy implication; Inflation; Productivity; Total factor productivity; Aging; Europe; Central and Eastern Europe; Baltics