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.
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)
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)
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.
Source: Organisation for Economic Co-operation and Development
- 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.
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.
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.
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.
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 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.”
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.
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.
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.
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.
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
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.