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Business and Economics > Production and Operations Management

You are looking at 1 - 10 of 88 items for :

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Cover IMF Working Papers
The Economic Costs of Temperature Uncertainty
Luca Bettarelli
,
Davide Furceri
,
Michael Ganslmeier
, and
Marc Schiffbauer
Beyond its environmental damage, climate change is predicted to produce significant economic costs. Combining novel high-frequency geospatial temperature data from satellites with measures of economic activity for the universe of US listed firms, this article examines a potentially important channel through which global warming can lead to economic costs: temperature uncertainty. The results show that temperature uncertainty—by increasing power outages, reducing labor productivity, and increasing the degree of exposure of firms to environmental and non-political risks, as well as economic uncertainty at the firm-level—persistently reduce firms’ investment and sales. This effect varies across firms, with those characterized by tighter financial constraints being disproportionally more affected.
Keywords:
Temperatures; Temperature Volatility; Uncertainty; Firms.; temperature uncertainty; impact of Temperature volatility; firms' characteristic; temperature data; firms' investment; Climate change; Labor productivity; Natural disasters; Employment; Global
Cover IMF Staff Country Reports
People’s Republic of China: Selected Issues
International Monetary Fund. Asia and Pacific Dept
Selected Issues
Keywords:
service sector productivity; B. deflation vulnerability index; outward FDI; inflation expectation; emissions trading system; Foreign direct investment; Services sector; Total factor productivity; Inflation; Global
Cover IMF Working Papers
Shedding Light on the Local Impact of Temperature
Da Hoang
,
Duong Trung Le
,
Ha Nguyen
, and
Nikola Spatafora
We use a new dataset to estimate the impact of temperature on economic activity at a more geographically and temporally disaggregated level than the existing literature. Analyzing 30-kilometer grid cells at a monthly frequency, temperature has a negative, highly statistically significant, and quantitatively large effect on output: a 1 °C increase in monthly temperature is associated with a 0.77 percent reduction in nighttime lights, a proxy for local economic activity. The effects of even a temporary increase in temperature persist for almost one year after the shock. Increases in temperature have an especially large, negative impact on growth in poorer countries, indicating that they are more vulnerable to the impact of climate change.
Keywords:
Climate change; temperature; economic growth; nighttime lights; B. data description; IMF working paper No. 24/178; impact of temperature; Google Earth engine; temperature shock; Productivity; Global
Cover IMF Staff Country Reports
Hungary: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues paper presents monetary policy analysis with a quarterly projection model (QPM) in Hungary. The standard QPM is adapted to reflect some specific features of the Hungarian economy and post-Covid set of shocks. Inflation is modelled in greater sectoral detail, including the separation of core goods and services, to capture differences in their drivers and dynamics and to model spillovers of shocks from one sector to another. Following a period of large interest rate reductions, the projections from the QPM suggest that the next phase of monetary policy normalization should proceed cautiously and more gradually. Results from the model should be used alongside other forms of analysis and expert judgement in determining the optimal path of monetary policy. Data should be watched keenly to assess the realism of the model’s projections.
Keywords:
income convergence; E. impulse response; convergence in Hungary; beta convergence; monetary policy shock; Inflation; Corporate sector; Income; Income inequality; Global; Europe
Cover IMF Staff Country Reports
Euro Area Policies: 2024 Annual Consultation-Press Release; Staff Report; and Statement by the Executive Director for Member Countries
International Monetary Fund. European Dept.
The 2024 Article IV Consultation explains that the euro area is recovering gradually, with a modest acceleration of growth projected for 2024, gathering further speed in 2025. Increasing real wages together with some drawdown of household savings are contributing to consumption, while the projected easing of financing conditions is supporting a recovery in investment. A modest pickup in growth is projected for 2024, strengthening further in 2025. This primarily reflects expected stronger consumption on the back of rising real wages and higher investment supported by easing financing conditions. Inflation is projected to return to target in the second half of 2025. The economy is confronting important new challenges, layered on existing ones. Beyond returning inflation to target and ensuring credible fiscal consolidation in high-debt countries, the euro area must urgently focus on enhancing innovation and productivity. Higher growth is essential for creating policy space to tackle the fiscal challenges of aging, the green transition, energy security, and defense.
Keywords:
EU institution; EU industrial; headline inflation; EU climate; two-sided inflation risk; Inflation; Labor markets; Fiscal consolidation; Europe; Global
Cover IMF Staff Country Reports
Burkina Faso: Selected Issues
International Monetary Fund. African Dept.
This Selected Issues paper highlights trends, impacts, and policy implications in Burkina Faso. Regional insecurity has also created increased cross-border displacement, both into and out of Burkina Faso. Burkina Faso has devised several policy responses, including in cooperation with international partners. Despite these measures, the persistent crisis of forced displacement means that the need for humanitarian assistance remains. A successful strategy for addressing the displacement crisis should be broad-based in terms of partners and approaches. Given the country's economic and financial challenges, an in-depth understanding is needed of the economic impact of forced displacement and possible solutions. In other countries, studies show positive economic outcomes to host regions of forced displacement. The inclusion of forced displaced persons in the Unified Social Register and national social nets programs would facilitate the implementation of assistance and, along with other national repositories help improve urban management and budget planning.
Keywords:
growth experience; C. socio-economic Impact; C. policy response; impact of climate change; agriculture productivity; Climate change; Productivity; Food security; Global; Sub-Saharan Africa
Cover IMF Working Papers
Climate Policies and External Adjustment
Rudolfs Bems
,
Luciana Juvenal
,
Weifeng Liu
, and
Warwick J. McKibbin
This paper assesses the economic effects of climate policies on different regions and countries with a focus on external adjustment. The paper finds that various climate policies could have substantially different impacts on external balances over the next decade. A credible and globally coordinated carbon tax would decrease current account balances in greener advanced economies and increase current accounts in more fossil-fuel-dependent regions, reflecting a disproportionate decline in investment for the latter group. Green supply-side policies—green subsidy and infrastructure investment—would increase investment and saving but would have a more muted external sector impact because of the constrained pace of expansion for renewables or the symmetry of the infrastructure boost. Country characteristics, such as initial carbon intensity and net fossil fuel exports, ultimately determine the current account responses. For the global economy, a coordinated climate change mitigation policy package would shift capital towards advanced economies. Following an initial rise, the global interest rates would fall over time with increases in the carbon tax. These external sector effects, however, depend crucially on the degree of international policy coordination and credibility.
Keywords:
Global climate policies; carbon tax; net-zero emissions; current account balances; international capital flows; dynamic general equilibrium modelling; G-Cubed; climate change mitigation policy package; current account response; IMF working paper 24/162; infrastructure investment; investment response; Current account; Greenhouse gas emissions; Productivity; Global; Europe
Cover IMF Working Papers
Hanging Out to Dry? Long-term Macroeconomic Effects of Drought in Fragile and Conflict-Affected States
Kalin I Tintchev
and
Laura Jaramillo
Using a comprehensive drought measure and a panel autoregressive distributed lag model, the paper finds that worsening drought conditions can result in long-term scarring of real GDP per capita growth and affect long-term price stability in Fragile and Conflict-Affected States (FCS), more so than in other countries, leaving them further behind. Lower crop productivity and slower investment are key channels through which drought impacts economic growth in FCS. In a high emissions scenario, drought conditions will cut 0.4 percentage points of FCS’ growth of real GDP per capita every year over the next 40 years and increase average inflation by 2 percentage points. Drought will also increase hunger in FCS, from alreay high levels. The confluence of lower food production and higher prices in a high emissions scenario would push 50 million more people in FCS into hunger. The macroeconomic effects of drought in FCS countries are amplified by their low copying capacity due to high public debt, low social spending, insufficient trade openness, high water insecurity, and weak governance.
Keywords:
climate change; long-term growth and inflation; climate policy; drought condition; FCS country; FCS group specification; drought measure; FCS' growth; Natural disasters; Food production; Productivity; Global; Sub-Saharan Africa
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