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June 1, 2021

As preparations are made for the G7 Summit in the UK next week, top of the agenda is how to end the COVID-19 pandemic and secure the global recovery. Urgent challenges face us.

 

By now it has become abundantly clear there will be no broad-based recovery without an end to the health crisis. Access to vaccination is key to both.

 

There has been impressive progress on the vaccination front.  Scientists have come up with multiple vaccines in record time.  Unprecedented public and private financing has supported vaccine research, development and manufacturing scale-up. But a dangerous gap between richer and poorer nations persists.

 

In fact, even as some affluent countries are already discussing the rollout of booster shots to their populations, the vast majority of people in developing countries—even front-line health workers— have still not received their first...

By Kristalina Georgieva, Stefania Fabrizio, Diego B. P. Gomes, and Marina M. Tavares

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A year ago, the world changed. While the pandemic’s effect on workers has varied worldwide, the new reality has left many mothers scrambling.With schools and daycares closed, many were forced to leave their jobs or cut the hours they worked.

New IMF estimates confirm the outsized impact on working mothers, and on the economy as a whole. In short, within the world of work, women with young children have been among the biggest casualties of the economic lockdowns.

Mothers of young children have been disproportionately affected by the lockdown.

Three countries—the United States, the United Kingdom, and Spain—illustrate the varied impact of the pandemic on workers. These three countries were among the most heavily hit by the virus globally, but it is the United States that saw the most job...

President of the Republic of Korea Moon Jae-in: Madame Managing Director, can you introduce the efforts being undertaken at the international organization level to respond to the climate crisis?

 

The Managing Director: Thank you very much, President Moon. Thank you for bringing us together in a timely manner for this truly global summit, and thank you for your leadership over the years. 

 

Your pledge for Korea to achieve carbon neutrality by 2050 is an important step forward. And your Green New Deal kickstarts the progress towards the neutrality goal, while also charting a post-COVID-19 recovery path for the Korean economy. And this is exactly what we at the IMF urge countries to do, to follow that path, to embrace an inclusive, green recovery.

 

Each country's circumstances are different, but our research shows that there are generally three elements for a comprehensive green policy package,...

May 27, 2021

New Zealand has enjoyed a rapid economic recovery from the COVID-19 crisis, helped by strong health and economic policy responses. Our latest assessment of New Zealand’s economy looks at strategies to support near- and medium-term growth.

May 31, 2021

President of the Republic of Korea Moon Jae-in: Madame Managing Director, can you introduce the efforts being undertaken at the international organization level to respond to the climate crisis?

 

The Managing Director: Thank you very much, President Moon. Thank you for bringing us together in a timely manner for this truly global summit, and thank you for your leadership over the years. 

 

Your pledge for Korea to achieve carbon neutrality by 2050 is an important step forward. And your Green New Deal kickstarts the progress towards the neutrality goal, while also charting a post-COVID-19 recovery path for the Korean economy. And this is exactly what we at the IMF urge countries to do, to follow that path, to embrace an inclusive, green recovery.

 

Each country's circumstances are different, but our research shows that there are generally three elements for a comprehensive green policy...

Author/Editor:

Nicola Pierri ; Yannick Timmer

Publication Date:

September 25, 2020

Electronic Access:

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Summary:

We study the economic effects of information technology (IT) adoption during the COVID-19 pandemic. Using data on IT adoption covering almost three million establishments in the US, we find that technology adoption can partly shield the economy from the impact of the pandemic. In areas where firms adopted more IT the unemployment rate rose less in response to social distancing. Our estimates imply that if the pandemic had hit the world 5 years ago, the resulting unemployment rate would have been 2 percentage points higher during April and May 2020 (16% vs. 14%), due to the lower availability of IT. Local IT adop-tion mitigates the labor market consequences of the pandemic for all individuals, regardless of gender and race, except those with...

Author/Editor:

Ruchir Agarwal ; Gita Gopinath

Publication Date:

May 19, 2021

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

Urgent steps are needed to arrest the rising human toll and economic strain from the COVID-19 pandemic that are exacerbating already-diverging recoveries. Pandemic policy is also economic policy as there is no durable end to the economic crisis without an end to the health crisis. Building on existing initiatives, this paper proposes pragmatic actions at the national and multilateral level to expeditiously defeat the pandemic. The proposal targets: (1) vaccinating at least 40 percent of the population in all countries by the end of 2021 and at least 60 percent by the first half of 2022, (2) tracking and insuring against downside risks, and (3) ensuring widespread testing and tracing, maintaining adequate stocks of therapeutics, and enforcing public...

By Abebe Aemro Selassie and Andrew Tiffin

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Imagine you’re a policymaker in sub-Saharan Africa. You’ve been charged with lifting your country out of the worst health crisis in living memory, and nobody around you knows when it will end—the second wave that gripped the region earlier in the year has eased, but many countries are nonetheless bracing for further waves as winter approaches.

One piece of good news is that a global recovery is well underway. Key economies are rebounding sharply, global trade has improved, commodity prices are higher, and investment flows have resumed.

The bad news is that, for sub-Saharan Africa, at least, near-term growth prospects are somewhat more subdued. And as long as widespread vaccination remains out of reach, you will face the unenviable task of trying to boost your economy while simultaneously dealing with repeated COVID-19 outbreaks as they...

The goal is to better help policymakers respond to risks and uncertainty, protect global financial stability, strengthen inclusive growth, and better understand how the financial sector and the economy affect one another.

The regular health check of members’ economies, known as the Article IV consultations, will continue to cover fiscal, monetary, exchange rate and financial issues, which are at the heart of the Fund’s work. Going forward, as climate change, digital technology, inequality, and global events like the pandemic shape a changing world, the approach looks to the future to give countries even more timely and targeted policy advice.

The review comprises ten policy papers that you will find below.

Creating a more level playing field is now more important than ever. And governments will need to achieve it across a wide range of sectors—from brewing through hospitals to digital.

New IMF research shows that key indicators of market power are on the rise—such as the markup of prices over marginal cost, or the concentration of revenues among the four biggest players in a sector. Due to the pandemic, we estimate that this concentration could now increase in advanced economies by at least as much as it did in the fifteen years to end of 2015. Even in those industries that benefited from the crisis, such as the digital sector, dominant players are among the biggest winners.

A decades-long trend set to worsen?

A pandemic-driven rise in market power across multiple industries would exacerbate a trend that goes back over four decades. For example, global price markups have risen by more than 30 percent, on average, across listed firms in advanced economies...

By IMFBlog

Throughout 2020 and into 2021, the global financial system withstood the effects of the global pandemic and economic lockdowns due to unprecedented policy support. Strong financial systems that are well regulated and well supervised help maintain financial stability. But like a well calibrated engine on a car, maintenance is key. Each year the IMF takes a look under the hood of select economies, which helps to unmask vulnerabilities that could present bigger problems down the road.

The Financial Sector Assessment Program, or “FSAP” as it’s widely known, helps to assess financial vulnerabilities and make financial systems stronger and better able to withstand adverse events. The IMF considers country-specific features of financial systems and tailors its analysis to the needs of each member participating in the program. Assessments for advanced economies are done by the IMF alone, while those for other economies are typically carried out jointly...

The Bank for International Settlements, Bank of France, International Monetary Fund and Network for Greening the Financial System are joining forces to co-sponsor a truly unique global virtual conference on "How in practice can the financial sector take immediate action against climate change-related risks?".

By Abebe Aemro Selassie and Andrew Tiffin

??, Español, Français, ???,  Português, ???????

Imagine you’re a policymaker in sub-Saharan Africa. You’ve been charged with lifting your country out of the worst health crisis in living memory, and nobody around you knows when it will end—the second wave that gripped the region earlier in the year has eased, but many countries are nonetheless bracing for further waves as winter approaches.

One piece of good news is that a global recovery is well underway. Key economies are rebounding sharply, global trade has improved, commodity prices are higher, and investment flows have resumed.

The bad news is that, for sub-Saharan Africa, at least, near-term growth prospects are somewhat more subdued. And as long as widespread vaccination remains out of reach, you will face the unenviable task of trying to boost your economy while simultaneously dealing with repeated COVID-19 outbreaks as they...

As the IMF has warned, economic recoveries are diverging dangerously. The disparities will widen further between wealthy countries that have widespread access to vaccines, diagnostics, and therapeutics, and poorer countries still struggling to inoculate frontline healthcare workers. As of the end of April 2021, less than two percent of Africa’s population had been vaccinated. By contrast, over 40 percent of the population in the United States and over 20 percent in Europe had received at least one dose of the vaccine.

It is well understood that there can be no lasting end to the economic crisis without an end to the health crisis. Pandemic policy is thus economic policy. It is critical for global macroeconomic and financial stability, which makes it of fundamental importance to the IMF and other economic institutions. Ending the pandemic is a solvable problem but requires further coordinated global action.

The latest research by IMF staff analyzes...

As the IMF has warned, economic recoveries are diverging dangerously. The disparities will widen further between wealthy countries that have widespread access to vaccines, diagnostics, and therapeutics, and poorer countries still struggling to inoculate frontline healthcare workers. As of the end of April 2021, less than two percent of Africa’s population had been vaccinated. By contrast, over 40 percent of the population in the United States and over 20 percent in Europe had received at least one dose of the vaccine.

It is well understood that there can be no lasting end to the economic crisis without an end to the health crisis. Pandemic policy is thus economic policy. It is critical for global macroeconomic and financial stability, which makes it of fundamental importance to the IMF and other economic institutions. Ending the pandemic is a solvable problem but requires further coordinated global action.

The latest research by IMF staff analyzes...

Financial regulation hasn’t caught up with risks posed by big tech firms; it’s time for a policymaker rethink

Large technology companies such as Alibaba, Amazon, Google, and Tencent—“big techs”—are coming under policymakers’ spotlights, and political momentum is growing for new competition and antitrust legislation. As big techs expand their financial offerings, these efforts are particularly relevant for financial authorities: the current regulatory framework could fail to contain the risks these new business models bring to the financial sector. A new policy approach is needed that takes into account the unique features of big techs—such as their vast scale, ample customer base, and access to large amounts of data—and captures the risks from the significant interconnection among different entities within a big tech group and the broader financial system (Crisanto, Ehrentraud, and Fabian 2021).

Big tech’s involvement in finance started with payments,...

On publication of contract information, most of the commitments have or are in the process of being met, including, for example, in the Dominican Republic, Guinea, Nepal, and Ukraine. In some countries, capacity constraints contribute to limited progress. In these cases, the IMF is providing capacity development to support implementation.

Author/Editor:

Mariya Brussevich ; Era Dabla-Norris ; Bin Grace Li

Publication Date:

May 12, 2021

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

This paper examines gender inequality in the context of structural transformation and rebalancing in China. We document declining women's relative wages and labor force participation in China during the last two decades, despite rapid growth and expansion of the service sector. Using household data, we provide evidence consistent with a U-shaped relationship between economic development and women's labor market outcomes. Using a model of structural transformation, we show that labor market barriers for women have increased over time. Model counterfactuals suggest that removing these barriers and increasing service sector productivity can boost both gender equality and economic growth in China.