a column by Tito Cordella and Andrew Powell for VOX: CEPR’s Policy Portal
Countries almost always repay loans from the IMF and the World Bank before others, even though this preferred treatment rarely appears in legal contracts.
This column presents a framework to investigate this puzzle. It argues that the ability to restrict lending allows international financial institutions to lend at the risk-free rate and creates incentives for repayment. IMF and World Bank loans are thus complementary to commercial lending.
Continue reading
Hazel’s comment:
I think I understand the issues involved a lot better now than I did before reading this.
Showing posts with label IMF. Show all posts
Showing posts with label IMF. Show all posts
Tuesday, 10 September 2019
Thursday, 27 June 2019
A Global Picture of Public Wealth
a post by Jason Harris, Abdelhak Senhadji and Alexander F. Tieman (International Monetary Fund) for the Public Financial Management blog “Making Public Money Count”
Our new data on government assets released today [18 June 2019] shows that when governments know what they own, they can make better use of the assets for the well-being of all their citizens. We make these data free and publicly available for all to use because we believe transparency can help create better public policy.
The chart shows that advanced economies have larger balance sheets compared to emerging markets and low-income developing countries. This reflects the size of their public sectors, which generally provide more infrastructure and services. But advanced economies also have larger liabilities and, on average, lower net worth.
Continue reading
Our new data on government assets released today [18 June 2019] shows that when governments know what they own, they can make better use of the assets for the well-being of all their citizens. We make these data free and publicly available for all to use because we believe transparency can help create better public policy.
The chart shows that advanced economies have larger balance sheets compared to emerging markets and low-income developing countries. This reflects the size of their public sectors, which generally provide more infrastructure and services. But advanced economies also have larger liabilities and, on average, lower net worth.
Continue reading
Wednesday, 29 May 2019
Public debt and the risk premium: A dangerous doom loop
a column by Cinzia Alcidi and Daniel Gros for VOX: CEPR’s Policy Portal
The relationship between high public debt and low interest rates is once again at the forefront of debate.
This column shows that countries with high debt levels pay a risk premium. This creates the potential for self-reinforcing loops of high debt and high risk premia, which can become explosive.
Continue reading
Hazel’s comment:
I realise that this column is all about countries, large organisations, public debt etc but the underlying premise applies to individuals and households as well.
Too much debt is not a good thing.
The relationship between high public debt and low interest rates is once again at the forefront of debate.
This column shows that countries with high debt levels pay a risk premium. This creates the potential for self-reinforcing loops of high debt and high risk premia, which can become explosive.
Continue reading
Hazel’s comment:
I realise that this column is all about countries, large organisations, public debt etc but the underlying premise applies to individuals and households as well.
Too much debt is not a good thing.
Thursday, 2 May 2019
The effectiveness of the global financial safety net depends on the tools and shocks
a column by Beatrice Scheubel, Livio Stracca and Cédric Tille for VOX: CEPR’s Policy Portal
More than ten years on from the start of the Global Crisis, policymakers are discussing the effectiveness of the global financial safety net – the combination of reserves, central bank swap lines, regional financial arrangements, and the IMF.
This column evaluates the effectiveness of the use of IMF support and foreign reserves in globally driven crises. It finds that actual use of IMF support helps during currency crises – the type of crisis for which the support was originally designed.
Use of reserves is of limited effectiveness and only during sudden stops.
Continue reading
More than ten years on from the start of the Global Crisis, policymakers are discussing the effectiveness of the global financial safety net – the combination of reserves, central bank swap lines, regional financial arrangements, and the IMF.
This column evaluates the effectiveness of the use of IMF support and foreign reserves in globally driven crises. It finds that actual use of IMF support helps during currency crises – the type of crisis for which the support was originally designed.
Use of reserves is of limited effectiveness and only during sudden stops.
Continue reading
Friday, 30 November 2018
Dirty work: Buying votes at the UN Security Council
a column by Axel Dreher, Valentin Lang, B. Peter Rosendorff and James Raymond Vreeland for VOX: CEPR&rsquo's Policy Portal
Countries that vote with the US when serving on the UN Security Council also receive more financial assistance.
This column uses voting records in the Council to show that when these countries were US allies, they received more in US aid, but when the countries were not natural allies, they received more financial assistance from US-dominated international institutions instead.
Continue reading
Countries that vote with the US when serving on the UN Security Council also receive more financial assistance.
This column uses voting records in the Council to show that when these countries were US allies, they received more in US aid, but when the countries were not natural allies, they received more financial assistance from US-dominated international institutions instead.
Continue reading
Sunday, 4 December 2016
Sharing Resource Revenues: Common Mistakes and How to Get it Right
from the International Monetary Fund: Public Financial Management Blog (Making Public Money Count)
Posted by Andrew Bauer and Sofi Halling
In nearly every country, subnational governments receive public funds, either through direct tax collection or intergovernmental transfers. But in more than 30 countries—from Bolivia to Canada to DRC to Indonesia—policymakers have chosen to create a special revenue sharing system to distribute non-renewable natural resource revenues (see map below). A recently published report by the Natural Resource Governance Institute (NRGI) and the United Nations Development Programme (UNDP) examines this important topic.
Full text of the blog post (HTML)
Posted by Andrew Bauer and Sofi Halling
In nearly every country, subnational governments receive public funds, either through direct tax collection or intergovernmental transfers. But in more than 30 countries—from Bolivia to Canada to DRC to Indonesia—policymakers have chosen to create a special revenue sharing system to distribute non-renewable natural resource revenues (see map below). A recently published report by the Natural Resource Governance Institute (NRGI) and the United Nations Development Programme (UNDP) examines this important topic.
Full text of the blog post (HTML)
Friday, 26 April 2013
Managing Public Finances Is Vital to Economic Prosperity
As posted on IMF Survey Online
Across the world many countries are now grappling with restoring sound and sustainable public finances: the way governments manage their budgets today will have profound economic effects in the years ahead. A new book by the IMF looks at reforms introduced by governments over the past two decades to improve management of public finances. These innovative ideas and reforms are changing the landscape of public finances and eventually aim to fundamentally change the way governments manage the public’s money.
Continue reading
Priced at $38 print and $19 PDF Public Financial Management and Its Emerging Architecture is available from the IMF Bookshop
Across the world many countries are now grappling with restoring sound and sustainable public finances: the way governments manage their budgets today will have profound economic effects in the years ahead. A new book by the IMF looks at reforms introduced by governments over the past two decades to improve management of public finances. These innovative ideas and reforms are changing the landscape of public finances and eventually aim to fundamentally change the way governments manage the public’s money.
Continue reading
Priced at $38 print and $19 PDF Public Financial Management and Its Emerging Architecture is available from the IMF Bookshop
Monday, 15 October 2012
Keynes was right, IMF admits. And the deficit fetishists are wrong.
via ToUChstone blog: A public policy blog from the TUC by Owen Tudor
This blog post is, in my opinion, very important, I have therefore taken what is for me an unusual step and reproduced the text in full – including all the links.
The IMF’s world growth forecasts issued last night [9 October 2012]were, bizarrely, not front page news in most papers this morning, despite the UK’s growth estimate being cut by more than any other OECD economy bar Italy. Slashing the growth rates of most industrialised and emerging economies (apart from the USA, where the growth prediction went up, on the assumption that a deal is reached on the budget) is only part of the news though. Far more revealing is the IMF’s explanation of why the IMF’s growth estimates have been persistently over-optimistic – covered in the report in a two-page box on page 41 co-authored by IMF Chief Economist Olivier Blanchard. An admission – what follows is really over-simplified, for clarity and brevity – apologies.
The IMF now accepts that for every £1 cut from government spending, the reduction of economic activity as a whole is potentially as much as £1.70 – far higher than the £1:£1 ratio the IMF’s original predictions were based on, and of course in completely the opposite direction that British Government policy is based on: that cuts in Government spending will be more than replaced by increased private sector expenditure (based on the so-called “crowding-out hypothesis”.)
So, the IMF is now said to be alarmed that the relentless austerity measures of most of the developed world could lead to weaker and weaker growth even in the emerging economies like Brazil and China. But, bizarrely, this hasn’t stopped the IMF from continuing to support the cuts that Governments like Britain’s are imposing. As former European trade union economist Andrew Watt puts it: “the patient is dying, increase the dosage!”
The argument that changes in Government spending have a greater impact on the economy than 1 is of course central to Keynesianism, and while Keynes is most famous for arguing that increased Government spending creates a “multiplier” of greater than 1 (hence his counter-intuitive allegory involving the state paying workers to bury cash, and letting the private sector dig it up again), cuts in Government expenditure also have a multiplier effect greater than 1. As the IMF now appear to have realised.
Instead of continuing austerity, we urgently need measures to restore growth, because that is the only sustainable (let alone morally acceptable) way to cut deficits.
Original post for related links and comments
This blog post is, in my opinion, very important, I have therefore taken what is for me an unusual step and reproduced the text in full – including all the links.
The IMF’s world growth forecasts issued last night [9 October 2012]were, bizarrely, not front page news in most papers this morning, despite the UK’s growth estimate being cut by more than any other OECD economy bar Italy. Slashing the growth rates of most industrialised and emerging economies (apart from the USA, where the growth prediction went up, on the assumption that a deal is reached on the budget) is only part of the news though. Far more revealing is the IMF’s explanation of why the IMF’s growth estimates have been persistently over-optimistic – covered in the report in a two-page box on page 41 co-authored by IMF Chief Economist Olivier Blanchard. An admission – what follows is really over-simplified, for clarity and brevity – apologies.
The IMF now accepts that for every £1 cut from government spending, the reduction of economic activity as a whole is potentially as much as £1.70 – far higher than the £1:£1 ratio the IMF’s original predictions were based on, and of course in completely the opposite direction that British Government policy is based on: that cuts in Government spending will be more than replaced by increased private sector expenditure (based on the so-called “crowding-out hypothesis”.)
So, the IMF is now said to be alarmed that the relentless austerity measures of most of the developed world could lead to weaker and weaker growth even in the emerging economies like Brazil and China. But, bizarrely, this hasn’t stopped the IMF from continuing to support the cuts that Governments like Britain’s are imposing. As former European trade union economist Andrew Watt puts it: “the patient is dying, increase the dosage!”
The argument that changes in Government spending have a greater impact on the economy than 1 is of course central to Keynesianism, and while Keynes is most famous for arguing that increased Government spending creates a “multiplier” of greater than 1 (hence his counter-intuitive allegory involving the state paying workers to bury cash, and letting the private sector dig it up again), cuts in Government expenditure also have a multiplier effect greater than 1. As the IMF now appear to have realised.
Instead of continuing austerity, we urgently need measures to restore growth, because that is the only sustainable (let alone morally acceptable) way to cut deficits.
Original post for related links and comments
Subscribe to:
Posts (Atom)
