Archive
Bank Leverage and Monetary Policy’s Risk-Taking Channel: Evidence from the United States
Bank Leverage and Monetary Policy’s Risk-Taking Channel: Evidence from the United States
Source: International Monetary Fund
We present evidence of a risk-taking channel of monetary policy for the U.S. banking system. We use confidential data on the internal ratings of U.S. banks on loans to businesses over the period 1997 to 2011 from the Federal Reserve’s survey of terms of business lending. We find that ex-ante risk taking by banks (as measured by the risk rating of the bank’s loan portfolio) is negatively associated with increases in short-term policy interest rates. This relationship is less pronounced for banks with relatively low capital or during periods when banks’ capital erodes, such as episodes of financial and economic distress. These results contribute to the ongoing debate on the role of monetary policy in financial stability and suggest that monetary policy has a bearing on the riskiness of banks and financial stability more generally.
International Migration Policies 2013
International Migration Policies 2013
Source: United Nations
International Migration Policies 2013 wall chart provides up-to-date and objective information on Government views and policies on immigration and emigration for all 193 Member States and three non-Member States of the United Nations. On immigration, it includes information on policies on major types of migration and migrant integration. On emigration, it includes information on policies to encourage the return of citizens and policies on diaspora matters. The wall chart also includes information on estimates of international migrant stock, female share of international migrants, net migration rate, and remittances. (12 MB)
Data Table (Excel)
World Abortion Policies 2013
Source: United Nations
World Abortion Policies 2013 wall chart provides up-to-date and objective information on abortion policies, i.e., legal grounds on which abortion is permitted, for each of the 193 Member States and three non-Member States of the United Nations. The wall chart also includes information on national estimates of abortion rate (where available), fertility rate, maternal mortality ratio, levels of contraceptive use and unmet need for family planning, and government support for family planning, as well as regional estimates of unsafe abortion rate. (6.7 MB)
Data Table (Excel)
Global Wage Report 2012/13: Wages and equitable growth
Global Wage Report 2012/13: Wages and equitable growth (PDF)
Source: International Labour Organization
This Global Wage Report presents data on trends in wages around the world and compares them with trends in labour productivity, analysing their complex effects on the global economy with a view to shedding some light on the current debates over distribution, competitiveness and labour costs. When wages rise in line with productivity increases they are both sustainable and create a stimulus for further economic growth by increasing households’ purchasing power. However for a decade or more before the crisis, the link between wages and labour productivity was broken in many countries and this contributed to the creation of global economic imbalances. The report shows that since the 1980s a majority of countries have experienced a downward trend in the “labour income share”, which means that a lower share of national income has gone into labour compensation and a higher share into capital incomes. This has happened most frequently where wages have stagnated but also in some countries where real wages have grown strongly. On a social and political level this trend risks creating perceptions that workers and their families are not receiving their fair share of the wealth they create. On an economic level, it could endanger the pace and sustainability of future economic growth by constraining wage-based household consumption. This is particularly true where the era of debt-based consumption has now led to an extended period in which households must pay off earlier debts.
Developing world faces domestic challenges, as global economy stabilizes
Developing world faces domestic challenges, as global economy stabilizes
Source: World Bank
The world economy appears to be getting back on its feet as risks from advanced economies ease.
Growth in the developing world will remain solid, albeit slower than the frenetic growth rates seen during the pre-crisis boom period, as developing countries grapple with home-grown challenges brought on by capacity constraints in many middle income countries, says the World Bank’s latest Global Economic Prospects, issued today.
Global GDP is expected to expand about 2.2 percent in this year and strengthen to 3.0 percent and 3.3 percent in 2014 and 2015.
Developing-country GDP is now projected to be around 5.1 percent in 2013, strengthening to 5.6 percent and 5.7 percent in 2014 and 2015, respectively, with growth in Brazil, Russia, India and South Africa projected to remain weak. Looking at broader region-wide trends, the East Asia & Pacific region is expected to grow by 7.3 percent this year; Europe & Central Asia by 2.8 percent; Latin America & the Caribbean by 3.3 percent; Middle East & North Africa by 2.5 percent; South Asia by 5.2 percent; and Sub-Saharan Africa by 4.9 percent.
For high-income countries, fiscal consolidation, high unemployment and still weak consumer and business confidence will keep growth this year to a modest 1.2 percent, firming to 2.0 percent in 2014 and 2.3 percent by 2015. Economic contraction in the Euro Area is estimated to be 0.6 percent for 2013, compared with the previous projection of 0.1 percent. Euro Area growth is expected to be a modest 0.9 percent in 2014 and 1.5 percent in 2015.
Raising the Returns to Innovation: Structural Policies for a Knowledge-Based Economy
Raising the Returns to Innovation: Structural Policies for a Knowledge-Based Economy (PDF)
Source: Organisation for Economic Co-operation and Development
Main findings
- Investment in knowledge-based capital (KBC) – assets that have no physical embodiment, such as computerised information, innovative property and economic competencies – has been rising significantly. This has implications for innovation and productivity growth and requires new thinking on policy.
- Investment in KBC differs greatly across countries. While the available data suggests that English speaking countries – particularly the United States – Japan and Sweden invest in the vicinity of 10% of GDP in KBC, investment in KBC in Italy, Portugal and Spain typically amounts to less than 5% of GDP.
- Some countries are more successful than others at channeling tangible resources to firms that invest in KBC. For example, the ease with which investment flows to firms that patent ideas in the United States and Sweden is over four times higher than for similar firms in Italy and Spain.
- Policies that make it easier to reallocate scarce resources to firms that invest in KBC will bolster the returns to investing in KBC.
- Such policies include those that enhance the functioning of product, labour and risk capital markets and bankruptcy laws that do not overly penalise failure.
- Well-defined intellectual property rights (IPR) provide firms with the incentive to innovate, especially in the chemicals and pharmaceutical sectors. However, such IPR regimes need to be coupled with procompetition policies to ensure maximum effect while rising litigation costs are undermining the effectiveness of the patent system in promoting innovation in the software sector.
- R&D tax incentives and, as a finding that contrasts with previous research, direct support measures are found to boost investment in KBC. However, design features are crucial in order to minimise the fiscal cost and unintended consequences of these policies.
HIV in the European Region: Using Evidence to Strengthen Policy and Programmes
HIV in the European Region: Using Evidence to Strengthen Policy and Programmes
Source: World Bank
Social and structural factors – like poverty, marginalization and stigma – and not just individual behaviors are shaping the HIV epidemic in Europe and Central Asia. This is the main conclusion of a new report released today by the World Bank Group, the World Health Organization Regional Office for Europe and the London School of Hygiene & Tropical Medicine.
The study systematically reviews evidence on HIV vulnerability and response in all 53 countries of the WHO European Region, stretching from Iceland to the borders of China.
The report focuses on key populations most at risk of HIV infection: people who inject drugs, sex workers and men who have sex with men. It confirms that they are disproportionately affected by the growing HIV epidemic in Europe, where the number of reported HIV cases reached more than 1.5 million in 2011.
HIV cases in these three groups account for approximately 50% of total diagnoses. Economic volatility and recession risks are increasing vulnerability to HIV and infections.
Inequality and Poverty in the United States: Public Policies for Inclusive Growth
Inequality and Poverty in the United States: Public Policies for Inclusive Growth
Source: Organisation for Economic Co-operation and Development
Income inequality and relative poverty in the United States are among the highest in the OECD and have substantially increased over the past decades. These developments have been associated with a number of other worrying statistics, including low intergenerational social mobility and weak real income growth for many households. A more inclusive pattern of growth would require less pronounced gaps in outcomes and opportunities across social groups and a broader sharing of the benefits of growth. The present paper analyses the causes of US income inequality and relative poverty in an OECD context, especially the role of the tax-and-transfer system, and suggests public policies to promote inclusive growth. To a significant degree, high income inequality is attributable to the large dispersion of earned income, which should be addressed by reforming education, so as to provide disadvantaged students with the skills needed to fully realise their potential. In addition, taxes and transfers contribute less to income redistribution than in other OECD countries. If well designed, reforms that promote inclusive growth could also help reduce the market distortions resulting from the current tax-and-transfer system. In particular, phasing out personal and corporate tax expenditures that disproportionately benefit high earners would lower income inequality and improve resource allocation. As well, social transfers could be more effective in alleviating poverty through better targeting of the truly needy while reducing administrative complexity.
Sting operation – jellyfish “blooms” may endanger fish stocks
Sting operation – jellyfish "blooms" may endanger fish stocks
Source: United Nations Food and Agricultural Organization
Surges in jellyfish populations may be one reason for a drop in fish stocks observed in the Mediterranean and Black Sea, according to a new report published by FAO.
Overfishing, which removes top predators from the sea, is one of the factors behind jellyfish "blooms", or suddenly increased numbers. A "vicious circle" can then follow in which large numbers of medusae feed on fish larvae and juveniles , and "further reduce the resilience of fish populations already impacted by overfishing," according to the report, from FAO’s General Fisheries Commission for the Mediterranean.
Jellyfish "might be the proverbial straw that broke the camel’s back" says the Review of Jellyfish Blooms in the Mediterranean and Black Sea.
Normally, only the impact of human fishing activities is taken into account in setting sustainable fishing limits, the report says. But jellyfish can also have a high impact on fish eggs and larvae, either directly or by competing for the same food sources. They should thus be considered in any ecosystems-based approach to fisheries management.
Transforming Arab Economies: Towards Knowledge and Innovation-Driven Development Strategies
Transforming Arab Economies: Towards Knowledge and Innovation-Driven Development Strategies
Source: World Bank
A new World Bank-CMI-EIB and ISESCO report titled “Transforming Arab Economies: Traveling the Knowledge and Innovation Road” shows how an economy based on innovation and knowledge can help promote greater economic growth and spur competitiveness. The report, launched today in Rabat at an event organized with the Islamic Educational, Scientific and Cultural Organization (ISESCO), underlines that greater investment in a knowledge-economy model will be needed to meet the job creation challenge common to the region.
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The new report suggests that the extent of change will depend in good part on how well the knowledge economy takes hold throughout the region. Creating jobs entails more investment in knowledge-related sectors and new emphasis on how to develop competitive, productive, and sustainable economies.
New From the GAO
New GAO Reports
Source: Government Accountability Office
1. Social Security Administration: Long-Term Strategy Needed to Address Key Management Challenges. GAO-13-459, May 29.
http://www.gao.gov/products/GAO-13-459
Highlights – http://www.gao.gov/assets/660/654866.pdf
Podcast – http://www.gao.gov/multimedia/podcasts/654851
2. Human Capital: Additional Steps Needed to Help Determine the Right Size and Composition of DOD’s Total Workforce. GAO-13-470, May 29.
http://www.gao.gov/products/GAO-13-470
Highlights – http://www.gao.gov/assets/660/654881.pdf
3. UN Compensation: United Nations Should Clarify the Process and Assumptions Underlying Secretariat Professional Salaries. GAO-13-526, May 29.
http://www.gao.gov/products/GAO-13-526
Highlights – http://www.gao.gov/assets/660/654876.pdf
4. Worker Safety and Health at Department of Energy Sites. GAO-13-497R, May 29.
http://www.gao.gov/products/GAO-13-497R
5. Export-Import Bank: Financing of Dual-Use Exports. GAO-13-628R, May 29.
http://www.gao.gov/products/GAO-13-628R
World Health Statistics 2013
Source: World Health Organization
World Health Statistics 2013 contains WHO’s annual compilation of health-related data for its 194 Member States, and includes a summary of the progress made towards achieving the health-related Millennium Development Goals (MDGs) and associated targets.
This year, it also includes highlight summaries on the topics of reducing the gaps between the world’s most-advantaged and least-advantaged countries, and on current trends in official development assistance (ODA) for health.
The Drug Problem in the Americas
The Drug Problem in the Americas (PDF)
Source: Organization of American States
From press release:
The Report on the Drug Problem in the Americas was delivered, by the OAS Secretary General, José Miguel Insulza, to the President of Colombia, Juan Manuel Santos on Friday, May 17, 2013. The document is composed of two parts: the Analytical Report, which explains the reasons that lead society to worry about drug consumption and to try to control its effects on human health and the Scenarios Report, an examination of the paths that the phenomenon could take in the coming years in the region.
For his part, the CICAD Chair and Minister of Public Security of Costa Rica, Mario Zamora Cordero, closed the session by stating that “more judges, more prosecutors and more police will mean more people arrested but not fewer crimes committed. In this Report we have the key to how to address the issue of violence associated with drug use.”
Global Monitoring Report 2013 : Rural-Urban Dynamics and the Millennium Development Goals
Global Monitoring Report 2013 : Rural-Urban Dynamics and the Millennium Development Goals
Source: World Bank
The Global Monitoring Report 2013: Rural-Urban Dynamics and the Millennium Development Goals examines rural-urban disparities in the achievement of the Millennium Development Goals (MDGs) and how urbanization, if managed well, can contribute to the attainment of these goals. The report provides information about the differences in progress toward the MDGs across geographical areas and recognizes that urban populations are better off than their rural brethren. However, unfettered urbanization can cause migrants and the urban poor to end up in slums where attainment of the MDGs lags. GMR 2013 calls for an integrated strategy to better manage the planning-connecting-financing formula of urbanization. Notwithstanding the importance of urbanization in poverty reduction and MDG attainment, rural areas remain a huge challenge—one that underscores the importance of policies that can improve rural livelihoods. The rural-urban spectrum ranges from small towns to large cities. The general experience is that poverty is lowest in the largest cities and considerably higher in smaller towns. The MDGs reflect the basic needs of all citizens, and governments should aim to meet them fully in both urban and rural areas. However, resources are scarce, so priorities must be set and trade-offs made. The report argues that the sequencing of actions be tailored to local conditions when it comes to the degree of urbanization and rural-urban differences in MDG outcomes. The world has met four global MDG targets. New estimates confirm the 2012 reports that MDG 1.a—reducing the $1.25-a-day poverty rate (2005 purchasing power parity)—was reached in 2010, falling below half of its 1990 value. The world also met part of MDG 7.c—to halve the proportion of people without safe access to drinking water—in 2010. MDG 7.d—to improve significantly the lives of at least 100 million slum dwellers by 2020—was also achieved. Finally, the first part of MDG 3.a—to eliminate gender disparity in primary education— was accomplished in 2010. Global progress on the full MDG 3.a (to eliminate gender disparity in primary and secondary education) is close to being on track. Global Monitoring Report 2013 was prepared jointly by the World Bank and the International Monetary Fund, with consultations and collaborations with regional development banks and other multilateral partners.
Regional Economic Outlook: Western Hemisphere Latin America and the Caribbean
Regional Economic Outlook: Western Hemisphere Latin America and the Caribbean
Source: International Monetary Fund
Growth in Latin America is set to pick up to about 3½ percent in 2013, broadly in line with potential. The region continues to benefit from favorable external financing conditions and relatively high commodity prices, but these tailwinds are unlikely to last forever. The key challenges for policymakers today are preserving macroeconomic and financial stability, and building strong foundations for sustained growth in the future. More prudent fiscal policy would help ease pressure on capacity constraints, mitigate the widening of current account deficits, and prepare the economies better to deal with adverse external shocks. Exchange rate flexibility and prudential measures should continue to be used to discourage speculative capital flows. Sustaining strong output growth will require structural reforms to raise productivity growth.
Targets, Interest Rates, and Household Saving in Urban China
Targets, Interest Rates, and Household Saving in Urban China
Source: International Monetary Fund
This paper studies a panel of China’s provinces over the period 1996-2009 during which urban household saving rates increased from 19 percent of disposable income to 30 percent. It finds that the increase in urban saving rates is negatively associated with the decline in real interest rates over this period. This negative association suggests that Chinese households save with a target level of saving in mind. When the return to saving declines (increases), it becomes more difficult (easier) to meet a target and households increase (lower) their saving out of current disposable income to compensate. The results are robust across specifications and to the inclusion of additional variables. A main policy implication is that an increase in real deposit rates may help lower household saving and boost domestic consumption.
WMO Annual Climate Statement Confirms 2012 as Among Top Ten Warmest Years
WMO Annual Climate Statement Confirms 2012 as Among Top Ten Warmest Years
Source: World Meteorological Organization
The World Meteorological Organization’s Statement on the Status of the Global Climate says that 2012 joined the ten previous years as one of the warmest — at ninth place — on record despite the cooling influence of a La Niña episode early in the year.
The 2012 global land and ocean surface temperature during January–December 2012 is estimated to be 0.45°C (±0.11°C) above the 1961–1990 average of 14.0°C. This is the ninth warmest year since records began in 1850 and the 27th consecutive year that the global land and ocean temperatures were above the 1961–1990 average, according to the statement. The years 2001–2012 were all among the top 13 warmest years on record.
Regional Economic Outlook: Asia and Pacific
Regional Economic Outlook: Asia and Pacific
Source: International Monetary Fund
Growth in the Asia-Pacific region shows signs of improving as extreme risks emanating from advanced economies have receded and domestic demand remains resilient, supported by relatively easy financial conditions and robust labor markets. A small and gradual pick-up in growth to over 5¾ percent is projected in the course of 2013. Risks to the outlook from within the region, such as rising financial imbalances and asset prices in some economies, are coming clearer into focus. Although Asia’s banking and corporate sectors have solid buffers, monetary policymakers should stand ready to respond early and decisively to shifting risks, and macroprudential measures will also have a role to play. In many Asian economies, some fiscal consolidation could also rebuild the space needed to respond to future shocks and preempt potential overheating pressures from capital inflows. In particular, there is a growing need to make tax and spending policies more efficient. To sustain high growth rates and alleviate the “middle-income trap” across Emerging Asia, the policy agenda will vary by jurisdiction but will also often include strengthening infrastructure investment and reforming goods and labor markets.
City-Level Decoupling: urban resource flows and the governance of infrastructure transitions (2013)
City-Level Decoupling: urban resource flows and the governance of infrastructure transitions (2013)
Source: United Nations Environmental Programme
Building upon previous work of the International Resource Panel on Decoupling Natural Resource Use and Environmental Impacts from Economic Growth, this report examines the potential for decoupling at the city level. While the majority of the world’s population now live in cities and cities are where most resource consumption takes place, both the pressures and potentials to find ways to reconcile economic growth, wellbeing and the sustainable use of natural resources will therefore be greatest in cities.
Analysing the role of cities as spatial nodes where the major resource flows connect as goods, services and wastes, the report ‘s focus is how infrastructure directs material flows and therefore resource use, productivity and efficiency in an urban context. It makes the case for examining cities from a material flow perspective, while also placing the city within the broader system of flows that make it possible for it to function.
The report also highlights the way that the design, construction and operation of energy, waste, water, sanitation and transport infrastructures create a socio-technical environment that shapes the “way of life” of citizens and how they procure, use and dispose of the resources they require. Its approach is innovative in that it frames infrastructure networks as socio-technical systems, examining pressures for change within cities that go beyond technical considerations. The importance of intermediaries as the dominant agents for change is emphasized, as well as the fact that social processes and dynamics need to be understood and integrated into any assessment of urban infrastructure interventions and the reconfiguration of resource flows.
A set of 30 case studies provide examples of innovative approaches to sustainable infrastructure change across a broad range of urban contexts that could inspire leaders of other cities to embrace similar creative solutions. Of course, innovations in and of themselves do not suffice if they are not integrated into larger strategic visions for the city, and as each city is unique, interventions need to be tailored to the set of challenges and opportunities present in each case.
Global Financial Stability Report: Old Risks, New Challenges
Global Financial Stability Report: Old Risks, New Challenges
Source: International Monetary Fund
The April 2013: The Global Financial Stability Report examines current risks facing the global financial system and policy actions that may mitigate these. The April 2013 report analyzes the key challenges facing financial and nonfinancial firms as they continue to repair their balance sheets and unwind public and private debt overhangs. Chapter 1 also examines short- and medium-term stability risks in the euro area and the vulnerability of emerging market economies to persistent capital inflows. Chapter 2 takes a closer look at whether sovereign credit default swaps markets are good indicators of sovereign credit risk. Chapter 3 reports on unconventional monetary policy in some depth, including the policies pursued by the Federal Reserve, the Bank of England, the Bank of Japan, the European Central Bank, and the U.S. Federal Reserve.
