United States: Staff Report For the 2014 Article IV Consultation—Informational Annex
Author:
International Monetary Fund. Western Hemisphere Dept.
Search for other papers by International Monetary Fund. Western Hemisphere Dept. in
Current site
Google Scholar Close
Publication Date:
23 Jul 2014
eISBN:
9781498320528
Language:
English
Keywords:
ISCR; CR; asset purchase; labor market condition; FOMC participant; rate; job opening; Assessment program; budgetary fund; social security fund; Multiple currency practices; Reserve assets; External sector statistics; Exchange rate arrangements; Dissemination Standards Bulletin Board (DSBB)
Download PDF (858.9 KB)

Focus. The 2014 Article IV Consultation focused on five broad themes to strengthen therecovery and improve the long-term outlook: raising productivity growth and labor force participation, confronting poverty, keeping public debt on a sustained downward path, smoothly managing the exit from zero policy rates, and securing a safer financial system.Main policy issues.• Policies are needed to boost longer-term potential output through investments in infrastructure, raising educational outcomes, improving the tax structure, and developing and expanding a skilled labor force (including through immigration reform, job training, and providing childcare assistance for working families).• Forging agreement on a credible, medium-term consolidation plan should be a high priority and include steps to lower the growth of health care costs, reform social security, and increase revenues. In the absence of such a comprehensive agreement, efforts should still focus on identifying more modest opportunities to relax the near- term budget envelope, paid for with future fiscal savings.• An enduring consequence of the past recession has been a jump in the number of families living in poverty. Improved employment prospects and economic growth will be essential to reverse this upward movement. An expansion of the Earned Income Tax Credit and an increase in the minimum wage should also be part of the solution.• The goal for monetary policy is to manage the exit from zero interest rates in a manner that allows the economy to converge to full employment with stable prices while avoiding financial instability and negative spillovers to the global economy. This is a complex undertaking. To facilitate it, steps could be taken to expand the Fed’s communications toolkit so as to provide greater clarity on how the Federal Open Market Committee assesses progress toward its longer-run goals.• Continued regulatory oversight is needed to counter the emergence of financial imbalances, particularly those that may be growing outside of the banking system. Policies should also be deployed to keep mortgage credit accessible and attract more private capital into housing finance while minimizing risks to taxpayers.• The U.S. external position is assessed to be broadly consistent with medium-termfundamentals and desirable policies.

Abstract

Focus. The 2014 Article IV Consultation focused on five broad themes to strengthen therecovery and improve the long-term outlook: raising productivity growth and labor force participation, confronting poverty, keeping public debt on a sustained downward path, smoothly managing the exit from zero policy rates, and securing a safer financial system.Main policy issues.• Policies are needed to boost longer-term potential output through investments in infrastructure, raising educational outcomes, improving the tax structure, and developing and expanding a skilled labor force (including through immigration reform, job training, and providing childcare assistance for working families).• Forging agreement on a credible, medium-term consolidation plan should be a high priority and include steps to lower the growth of health care costs, reform social security, and increase revenues. In the absence of such a comprehensive agreement, efforts should still focus on identifying more modest opportunities to relax the near- term budget envelope, paid for with future fiscal savings.• An enduring consequence of the past recession has been a jump in the number of families living in poverty. Improved employment prospects and economic growth will be essential to reverse this upward movement. An expansion of the Earned Income Tax Credit and an increase in the minimum wage should also be part of the solution.• The goal for monetary policy is to manage the exit from zero interest rates in a manner that allows the economy to converge to full employment with stable prices while avoiding financial instability and negative spillovers to the global economy. This is a complex undertaking. To facilitate it, steps could be taken to expand the Fed’s communications toolkit so as to provide greater clarity on how the Federal Open Market Committee assesses progress toward its longer-run goals.• Continued regulatory oversight is needed to counter the emergence of financial imbalances, particularly those that may be growing outside of the banking system. Policies should also be deployed to keep mortgage credit accessible and attract more private capital into housing finance while minimizing risks to taxpayers.• The U.S. external position is assessed to be broadly consistent with medium-termfundamentals and desirable policies.

Fund Relations (AS OF MAY 31, 2014)

Membership Status: Joined 12/27/45; Article VIII

General Resources Account:

article image

SDR Department:

article image

Outstanding Purchases and Loans: None

Financial Arrangements: None

Projected Payments to the Fund:

(SDR Million; based on existing use of resources and present holdings of SDRs):

article image

Exchange Rate Arrangements.

The exchange rate of the U.S. dollar floats independently and is determined freely in the foreign exchange market. The United States has accepted the obligations under Article VIII, Sections 2(a), 3 and 4 of the IMF’s Articles of Agreement and maintains an exchange system free of multiple currency practices and restrictions on the making of payments and transfers for current international transactions, except for those measures imposed for security reasons. The United States notifies the maintenance of measures imposed for security reasons under Executive Board Decision No. 144-(52/51). The last of these notifications was made on June 2014 (see EBD/14/35, June 19, 2014).

Article IV Consultation.

The 2013 Article IV consultation was concluded on July 24, 2013 and the Staff Report was published as IMF Country Report No. 13/236. A fiscal Report of Observance of Standards and Codes was completed in the context of the 2003 consultation. A Financial System Assessment Program involved two missions, during October 14–November 3, 2009 and February 17–March 12, 2010. The Financial System Stability Assessment was discussed at the Board, together with the 2010 Article IV Consultation, on July 26, 2010.

The 2014 Article IV discussions took place April 30–May 23, 2014. Concluding meetings with Chair Yellen of the Board of Governors of the Federal Reserve System, and Treasury Secretary Lew occurred on June 12th. The Managing Director, Ms. Lagarde, the Deputy Managing Director, Mr. Shinohara, and WHD Director, Mr. Werner, participated in the concluding meetings. A press conference on the consultation was held on June 16th, 2014. The team comprised Nigel Chalk (head), Roberto Cardarelli, Ravi Balakrishnan, Francesco Columba, Deniz Igan, Lusine Lusinyan, Juan Solé, and Jarkko Turunen (all WHD); Niklas Westelius (SPR); David Jones (MCM). Simon Gray, John Kiff, Darryl King (all MCM), Steve Dawe, Emmanuel Mathias (all LEG), and Michele Ruta (SPR) participated in some of the meetings. Mr. Haarsager (Executive Director) and Mr. Weiss (Advisor) attended some of the meetings. Outreach included discussions with Congressional staff and think tanks. Unless an objection from the authorities of the United States is received prior to the conclusion of the Board’s consideration, the document will be published.

Statistical Issues

Statistical Issues:

Comprehensive economic data are available for the United States on a timely basis. The quality, coverage, periodicity, and timeliness of U.S. economic data are adequate for surveillance. Coverage of international capital flows in external sector statistics has been improved, with the June 2014 releases of BOP and IIP data on financial derivatives. The United States has subscribed to the Special Data Dissemination Standard (SDDS) and its metadata are posted on the Dissemination Standard Bulletin Board (DSBB).

United States. Table of Common Indicators Required for Surveillance

(As of June 18, 2014)

article image

Daily (D), Weekly (W), Biweekly (B), Monthly (M), Quarterly (Q), Annually (A); NA: Not Available.

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Same Series

Other IMF Content

Other Publishers

  • Collapse
  • Expand
Cover IMF Staff Country Reports
United States: Staff Report for the 2014 Article IV Consultation
Author:
International Monetary Fund. Western Hemisphere Dept.
Volume/Issue:
Volume 2014: Issue 221
Publisher:
International Monetary Fund
ISBN:
9781498320528
ISSN:
1934-7685
Pages:
65
DOI:
https://doi.org/10.5089/9781498320528.002