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Business and Economics > Production and Operations Management

You are looking at 1 - 10 of 197 items for :

  • Type: Journal Issue x
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Cover IMF Staff Country Reports
Chile: Selected Issues
International Monetary Fund. Western Hemisphere Dept.
2024 Selected Issues
Keywords:
input-output linkage; housing wealth effect; growth slowdown; real estate sector; risk assessment; Pension spending; Exports; Mortgages; Loans; Global; Eastern Europe
Cover IMF Working Papers
Competitiveness and Productivity in the Baltics: Common Shocks, Different Implications
Saioa Armendariz
,
Carlos de Resende
,
Alice Fan
,
Gianluigi Ferrucci
,
Bingjie Hu
,
Sadhna Naik
, and
Can Ugur
This paper examines competitiveness and productivity in the Baltics. Focusing on recent developments, it asks why Russia’s war in Ukraine led to a prolonged recession and strong decline in competitiveness in Estonia, while Latvia and Lithuania shielded their economies more effectively. The paper starts by documenting a deterioration in export performance across the region. Using a constant share decomposition, it finds that, unlike in Latvia and Lithuania, Estonia’s declining export share has been mainly linked to a reduction in the ‘intensive margin’—a sign of weakening external competitiveness and declining relative productivity. Multivariate filtering techniques and estimates of the real effective exchange rates based on historical productivity trends, consistent with Balassa-Samuelson, confirm that differences in long-term total factor productivity growth have affected external competitiveness. While Estonia’s post-GFC slowdown in productivity growth and real exchange rate appreciation have eroded its competitive edge, Latvia and Lithuania have shown greater resilience, aided by more balanced real effective exchange rates and, for Lithuania, stronger corporate balance sheets. A micro-econometric analysis further reveals that resource misallocation, particularly in the services sector, has been a key driver of declining productivity in the region. These findings underscore the need for targeted reforms to improve allocative efficiency, boost productivity, and restore competitiveness in the Baltic region.
Keywords:
Export shares; Competitiveness; Productivity; Baltics; export share; productivity in the Baltic; resource misallocation; productivity trend; TFP dynamics; TFP deceleration; Total factor productivity; Real effective exchange rates; Real exchange rates; 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
A Bitter Aftertaste: How State Aid Affects Recipient Firms and Their Competitors in Europe
Luis Brandão-Marques
and
Hasan H Toprak
Industrial policy is once again at the forefront of the policy debate around the world. However, state aid is a contentious issue in the European Union given the need to maintain a level playing in its single market. This paper estimates the effects of state aid between 2016 and 2023 on listed nonfinancial firms in Belgium, France, Germany, the Netherlands, Spain, and the United Kingdom (until 2020) using a high-frequency identification approach to address endogeneity. It finds that firms that receive state aid increase employment and revenue, but not investment or labor productivity. Moreover, it finds that there are adverse spillover effects to competing firms that significantly undo any positive own effects. These findings suggest that, should there be a case for providing state aid to firms in the European Union, this should be done at the European level instead of the member state level to mitigate adverse spillovers. Pooling resources and competitively allocating aid across the Union could preserve market competition, encourage firm entry, and ensure a more efficient distribution of funds.
Keywords:
Industrial policy; firm performance; state aid; spillovers; recipient firm; government intervention; effects of State; net impact; government failure; Employment; Productivity; Competition; Europe
Cover IMF Staff Country Reports
Denmark: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues paper discusses the macroeconomic impact of the pharmaceutical sector. The analysis focuses on Novo Nordisk, the leading pharmaceutical company in Denmark, and its productivity impact on the rest of the economy. Empirical evidence suggests only weak correlations between productivity shocks at Novo Nordisk and overall economic growth, as well as between Novo Nordisk’s productivity and that of other firms. The findings suggest there is limited risk that Denmark’s booming pharmaceutical company would become its “Nokia.” Although the pharmaceutical sector will be a key driver of growth, most of its production occurs overseas under Danish ownership. As a result, its linkages with the rest of the domestic economy, in terms of employment and supply chains, are somewhat limited. The empirical results also indicate limited spillover effects through productivity channels. However, the empirical results may underestimate the influence of Novo Nordisk due to limited data.
Keywords:
mitigating factor; productivity shock; E. policy option; Policy consideration; shocks to Novo Nordisk; energy firm; covered bond bond market; Nonbank financial institutions; Labor productivity; Covered bonds; Systemic risk assessment; Productivity; Global
Cover Finance & Development
Finance & Development, September 2024: Productivity and How to Revive It
International Monetary Fund. Communications Department
Productivity must play a more important role in driving sustained growth as our societies age. But there’s no consensus on how to reverse the broad slowdown in productivity growth seen across almost all countries over the past 20 years. F&D magazine’s September issue invites leading thinkers to examine productivity from multiple angles, including dynamism, innovation, demographics, and sustainability.
Keywords:
Productivity; total factor productivity; demographics; sustainable growth; economic growth; dynamism; innovation; international cooperation.; productivity gain; understanding productivity growth; productivity growth rebound; IMF photo; low-productivity firm; TFP advancement; Emerging and frontier financial markets; Tax avoidance; Global; West Africa; Europe; Central Asia; Asia and Pacific
Cover IMF Working Papers
Public Perceptions of Canada’s Investment Climate: A Natural Language Processing-Based Approach
Flora Lutz
,
Yuanchen Yang
, and
Chengyu Huang
Canada’s muted productivity growth during recent years has sparked concerns about the country’s investment climate. In this study, we develop a new natural language processing (NPL) based indicator, mining the richness of Twitter (now X) accounts to measure trends in the public perceptions of Canada’s investment climate. We find that while the Canadian investment climate appears to be generally favorable, there are signs of slippage in some categories in recent periods, such as with respect to governance and infrastructure. This result is confirmed by both survey-based and NLP-based indicators. We also find that our NLP-based indicators would suggest that perceptions of Canada’s investment climate are similar to perceptions of U.S. investment climate, except with respect to governance, where views of U.S. governance are notably more negative. Comparing our novel indicator relative to traditional survey-based indicators, we find that the NLP-based indicators are statistically significant in helping to predict investment flows, similar to survey-based measures. Meanwhile, the new NLP-based indicator offers insights into the nuances of data, allowing us to identify specific grievances. Finally, we construct a similar indicator for the U.S. and compare trends across countries.
Keywords:
Investment Climate; Canada; Machine Learning; Sentiment Analysis; muted productivity growth; investmest climate; investment flow; NLP-based indicator; Climate finance; Competition; Infrastructure; Productivity; Mining 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 World Economic Outlook, April 2024
World Economic Outlook, April 2024
Steady but Slow: Resilience amid Divergence
International Monetary Fund. Research Dept.

Abstract

The latest World Economic Outlook reports economic activity was surprisingly resilient through the global disinflation of 2022–23, despite significant central bank interest rate hikes to restore price stability. Risks to the global outlook are now broadly balanced compared with last year. Monetary policy should ensure that inflation touches down smoothly, while a renewed focus on fiscal consolidation is needed to rebuild room for budgetary maneuver and to ensure debt sustainability. Structural reforms are crucial to revive medium-term growth prospects amid constrained policy space.

Keywords:
global growth; inflation; economic projection; monetary policy; housing markets; medium-term growth; spillovers; advanced economy; monetary policy transmission; housing channel; housing market characteristic; economy-sector pair; middle-income economy; IMF staff calculation; Emerging and frontier financial markets; Housing prices; Mortgages; Total factor productivity; Global; Caribbean; Middle East and Central Asia; Europe; Central America; inflation expectation; interest rate hike; debt restructuring processes; commodity market development; Sub-Saharan Africa
Cover IMF Working Papers
Geoeconomic Fragmentation and International Diversification Benefits
Tatsushi Okuda
and
Tomohiro Tsuruga
This paper applies the two-country open-economy model with trade in stocks and bonds of Coeurdacier et al. (2010) to quantify the loss of international diversification benefits for major advanced economies, which have a significant presence in international financial markets, under geoeconomic fragmentation. We perform counterfactual simulations under different hypothetical fragmentation scenarios in which these economies are unable to trade with geopolitically distant countries, as measured by voting disagreement on foreign policy issues at the United Nations General Assembly meetings during 2012-2021. The simulation results imply a potentially significant loss of international diversification benefits of financial openness for the considered advanced economies by limiting trading to partner countries that are geopolitical allies with highly synchronized business cycles.
Keywords:
Geopolitical risk; financial integration; international risk sharing; diversification benefit; output volatility; volatility of Macro-Financial Variables; simulation result; investment efficiency process; Total factor productivity; Business cycles; Consumption; International capital markets; Output gap; Global