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Business and Economics > Production and Operations Management

You are looking at 1 - 10 of 18 items for :

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Cover IMF Staff Country Reports
Panama: Selected Issues
International Monetary Fund. Western Hemisphere Dept.
This Selected Issues paper presents the main features and weaknesses of the current Panamanian tax system and provides an international comparison of its performance. Panama’s macroeconomic performance has been notably robust. Panama’s macroeconomic performance has been notably robust, but Panama’s tax collection has been historically low. A tax system without adequate revenues led to chronic fiscal deficits and a lack of resources to invest in human capital (education and health) and promote social inclusion policies. In addition, the tax system is notably regressive, and several rules are very inefficient and distortive contradicting the overall policy objective of the country to attract investment. Taxation of the business sector is very complex. On the other hand, the system is very generous regarding benefits. Overall, the desirable reform direction is clear: A reduction in tax incentives, following their analysis, as well as stronger anti-abuse provisions, and revenues from an international minimum tax can finance reductions in the inefficient parts of the tax system, such as the multiple business taxes and the strict loss carry forward.
Keywords:
VAT indicator; directorate General; C. consumption tax; tax comparison; revenue performance; International reserves; Total factor productivity; Tax incentives; Corporate income tax; Caribbean; Central America; South America; Global; Asia and Pacific
Cover IMF Working Papers
Fiscal Stabilization and Growth: Evidence from Industry-level Data for Advanced and Developing Economies
Sangyup Choi
,
Davide Furceri
, and
João Tovar Jalles
Medium-term growth can be enhanced by fiscal stabilization. However, to date, no systematic effort has been made to study the specific channels through which fiscal stabilization affects growth. This paper examines the effect of fiscal stabilization on industrial growth and how this effect depends on different technological characteristics. It does so by applying a difference-in-difference approach to an unbalanced panel of 22 manufacturing industries for 55 advanced and developing economies over the period 1970-2014. The results suggest that fiscal stabilization fosters growth in industries with: i) higher external financial dependence and lower asset fixity; ii) higher degree of labor intensity; iii) higher investment lumpiness and relationship-specific input usage. These effects tend to be larger during economic recessions. The results are robust to different measures of fiscal stabilization and the inclusion of various interactions between a broad set of macroeconomic variables and production technologies.
Keywords:
WP; dependent variable; external finance; aggregate demand; capital depreciation; developing economy; interaction effect; industry-level data; fiscal stabilization; time varying coefficients; growth; technologies of production; asset fixity; baseline result; option-value effect; effect of fiscal stabilization; differential effect; Depreciation; Productivity; Global
Cover IMF Working Papers
Potential Output Growth Estimates for Central America and the Dominican Republic
Mr. Roberto Garcia-Saltos
,
Fan Zhang
, and
Iulia Ruxandra Teodoru
This paper presents estimates of potential output for all Central American economies. Our findings are that potential output growth has declined in recent years in most economies of Central America. Lower capital accumulation and TFP growth are accounting for most of this decline. Apart from Costa Rica, there are no indications of significant economic slack in 2015 in Central America. Looking forward, potential growth in most Central American economies is expected to continue at an average of 4 percent in the medium-term due to structural constraints to capital and employment growth, and low TFP growth. Increasing potential growth, thus, should be a policy priority and structural reforms must be directed at improving business conditions, product and labor markets, and enhancing the capacity for innovation.
Keywords:
WP; output gap; capital stock; potential output; productivity; macroeconomic modeling; production function; Central America; TFP performance; TFP series; employment growth; Central American economy; Total factor productivity; Employment; Production growth; Labor force participation; Western Hemisphere
Cover IMF Staff Country Reports
Guatemala: Selected Issues and Analytical Notes
International Monetary Fund. Western Hemisphere Dept.
This Selected Issues paper estimates potential output growth and the output gap for Guatemala. Potential output growth averaged 4.4 percent just before the global financial crisis but has since declined to 3.75 percent owing to lower capital accumulation and total factor productivity (TFP) growth. It is estimated at 3.8 percent in 2016, and the output gap has virtually closed. Potential growth is expected to reach 4 percent in the medium term owing to the expected improvements in TFP growth. Policies should also prioritize mobilizing domestic savings to invest and build a higher capital stock.
Keywords:
ISCR; CR; GDP; yield; Guatemala; food inflation; inflation headline inflation; inflation expectation; macroeconomic fundamentals; commodity price inflation; nominal interest rate; Financial inclusion; Inflation; Financial sector development; Credit; Global; Central America; Asia and Pacific; Caribbean
Cover IMF Staff Country Reports
El Salvador: Selected Issues
International Monetary Fund. Western Hemisphere Dept.
This paper focuses on policies to raise growth; underpin fiscal sustainability while enhancing social safety nets; and strengthen financial sector stability, deepening, and inclusiveness. GDP growth averaged 2 percent during 2000–14, well below the Central American regional average of 4½ percent. While the underlying causes of the low growth are complex, a key channel through which they are evident appears to be low investment. Given the need to increase growth, revenue-raising measures should be accompanied by cuts in distortionary taxation. Stress tests suggest that financial buffers are adequate to contain most risks. The financial deepening and advancing financial inclusion could have a meaningful impact on both growth and poverty.
Keywords:
ISCR; CR; TFP growth; employment growth; TFP; crowding out; liquidity; productivity shortfall; labor market rigidity; TFP performance; liquidity constraint; Pension spending; Fiscal rules; Pensions; Central America; Global
Cover IMF Staff Country Reports
El Salvador: Selected Issues
International Monetary Fund. Western Hemisphere Dept.
This Selected Issues paper assesses the potential output in El Salvador. Based on various filters and the production function approach, El Salvador’s potential growth is estimated at about 2 percent for 1999–2015, and the output gap is now virtually closed. Potential growth after the global financial crisis has fallen as a result of lower capital accumulation and total factor productivity (TFP). TFP growth depends on technological progress, as well as the institutional, regulatory, and legal environment in which businesses operate. From a cyclical perspective, the economy is assessed to be operating at potential and labor market conditions also appear to be broadly neutral. Strengthening capital and TFP growth going forward is critical to achieve the authorities’ goal of raising potential growth to 3 percent over the medium term. Structural reforms should prioritize mobilizing domestic savings to invest and build a higher capital stock, enhancing research and development/technological diffusion and competition in product and labor markets, strengthening institutions to secure property rights and reduce red tape, improving infrastructure, facilitating access to financing, and fostering human capital to boost TFP growth. Going forward, it is critical to undertake structural reforms to strengthen capital and TFP to raise potential growth.
Keywords:
ISCR; CR; product; policy uncertainty variable; unemployment gap; export products; investment driver; OECD product market regulation Database; fund staff estimate; Total factor productivity; Exports; Output gap; Potential output; Comparative advantage; Global; Central America
Cover IMF Working Papers
Fiscal Policy in Latin America over the Cycle
Mr. Alexander D Klemm
This paper provides an analysis of the cyclical stance of fiscal policy in Latin America. Its contributions include developing a new measure of the cyclicality of fiscal policy, careful analysis of the statistical significance of results, and accounting for the effect of commodity prices on fiscal balances. The new cyclicality measure takes into account both discretionary policy action and automatic stabilizers, but excludes additional revenues that are due to applying an unchanged average tax rate to nominal GDP in excess of potential. The paper finds that fiscal policy has been procyclical on average in Latin America, but counter or acyclical in advanced economies. Country-specific results are mostly insignificant, except in a few cases where policy is clearly procyclical. For some countries (Brazil, Chile, Colombia, El Salvador, and Mexico), there is evidence of a recent move toward more countercyclical policies.
Keywords:
WP; price index; spending; commodity price; Fiscal policy; business cycle; Latin America; commodity export; countercyclical fiscal policy; commodity price data; revenue reform; commodity export price; commodity revenue; price data; significance of the commodity price index; data from the UN Comtrade database; price data from the UN Comtrade database; gross commodity export; automatic stabilizers work; Fiscal stance; Output gap; Commodity prices; Automatic stabilizers; Sub-Saharan Africa
Cover IMF Staff Country Reports
Guatemala: Selected Issues and Analytical Notes
International Monetary Fund. Middle East and Central Asia Dept.
This Selected Issues paper estimates both Guatemala’s potential output and output gap using a wide range of econometric techniques. The analysis suggests that Guatemala’s potential output growth is about 3.5 percent for the whole sample period and that the output gap is almost closed. Results are highly robust among different methodologies. Among the methods used, several well-known time series filters and two different estimations of a state-space model are included. Additionally, a test for structural breaks in the series of potential GDP is presented. All methodologies conclude that the output gap at the end of 2012 is almost closed at -0.2 percent of potential GDP.
Keywords:
ISCR; CR; Guatemala; output gap help; debtor position; net; fund staff estimate; monetary policy rate; creditor position; Potential output; Basel III; Fiscal consolidation; Global; Europe; Caribbean
Cover IMF Working Papers
Potential Output and Output Gap in Central America, Panama and Dominican Republic
Mr. Christian A Johnson
Potential Output is a key factor for debt sustaintability analysis and for developing strategies for growth, but unfortunately it is an unobservable variable. Using three methodologies (production function, switching, and state-space), this paper computes potential output for CAPDR countries using annual data. Main findings are: i) CAPDR potential growth is about 4.4 percent while output gap volatility is about 1.9 percent; ii) The highest-potential growth country is Panama (6.5 percent) while the lowest-growth country is El Salvador (2.6 percent); iii) CAPDR business cycle is about eigth years.
Keywords:
WP; Potential growth; output gap; growth decomposition; switching; state-space model; output gap volatility; output gap-production function approach; output gap variability; standard deviation; CAPDR country; potential output gap; Potential output; Production growth; Sustainable growth; Total factor productivity; Central America
Cover IMF Working Papers
Is the Growth Momentum in Latin America Sustainable?
Mr. Sebastian Sosa
,
Ms. Evridiki Tsounta
, and
Miss Marie S Kim
A favorable external environment coupled with prudent policies fostered output growth in most of Latin America during the last decade. But, what were the drivers of this strong growth performance from the supply side and will this momentum be sustainable in the years ahead? We address these questions by identifying the proximate causes of the recent high GDP growth and estimating potential growth rates for the period ahead for a large group of Latin American countries based on standard (Solow-style) growth accounting methodologies. We find that factor accumulation (especially labor), rather than growth in total factor productivity (TFP), remains the main driver of GDP growth. Moving forward, given the expected moderation of capital accumulation and some natural constraints on labor, the strong growth momentum is unlikely to be sustainable unless TFP performance improves significantly.
Keywords:
WP; TFP growth; TFP performance; economic growth; potential growth; total factor productivity; Latin America; growth differential; TFP series; factors of production; TFP estimate; Production growth; Labor force participation; Human capital; Caribbean; Central America; Asia and Pacific; South America