Ukraine: A stress test of IMF credibility

Susan Schadler 09 October 2014

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The IMF will shortly go back to the drawing board with Ukraine. As it prepares to revise the economic programme on which the third tranche of its funding will be based, the IMF faces three interconnected problems:

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Topics:  Europe's nations and regions International finance

Tags:  Ukraine, IMF

Taking a bite out of Apple? Fixing international corporate taxation

Ruud de Mooij, Michael Keen, Victoria Perry 14 September 2014

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It’s hard to pick up a newspaper these days (or, more likely for those reading this, do the digital equivalent) without reading about Apple, Amazon, Google, or a host of others managing, by some magic, to pay little corporate income tax – and the consequent outrage of duly shocked and horrified politicians. Entertaining though all this is, understanding the rules that make such tax avoidance possible is a dull task that many of us are happy to leave to the tax nerds – detail really matters (just ask an international tax lawyer).

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Topics:  Taxation

Tags:  tax, taxation, IMF, corporate taxation, corporate income tax, spillovers, tax treaties, tax avoidance, multinationals, tax competition, tax harmonisation

Restoring financial stability with economic growth

James Boughton 15 September 2014

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No one would argue seriously any longer that the international financial system is working just fine. When the politicians and central bankers who govern the International Monetary Fund and the World Bank gather in Washington this October, much of the talk will be about the refusal of the US Congress to pass legislation that would reform the IMF.

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Topics:  Global governance International finance

Tags:  economic growth, financial stability, institutions, IMF, G20

Rapid growth in emerging markets and developing economies: Now and forever?

Giang Ho, Paolo Mauro 12 September 2014

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Projecting a country’s economic growth into the medium term and beyond is notoriously difficult. At the same time, getting the growth projections wrong has major adverse consequences. For fiscal policymakers, overestimating future economic growth implies underestimating the government debt-to-GDP ratio that will be reached at the end of the projection period (in the absence of corrective policy measures).

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Topics:  Development Macroeconomic policy

Tags:  optimism bias, forecasting, growth, IMF, World Bank

To exit the Great Recession, central banks must adapt their policies and models

Marcus Miller, Lei Zhang 10 September 2014

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“Practical men…are usually the slaves…[of] some academic scribbler of a few years back” – John Maynard Keynes.

For monetary policy to be most effective, Michael Woodford emphasised the crucial importance of managing expectations. For this purpose, he advocated that central banks adopt explicit rules for setting interest rates to check inflation and recession, and went on to note that:

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Topics:  Global crisis Macroeconomic policy Monetary policy

Tags:  Taylor rule, forward guidance, great moderation, global crisis, Great Recession, quantitative easing, DSGE models, expectations, tapering, US, UK, Europe, eurozone, ECB, Bank of England, central banking, IMF, unconventional monetary policy

Conflict between US-led and China-led economic architecture

Pradumna B. Rana 05 August 2014

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The Bretton Woods agreement – which is 70 years old this month – established three institutions to promote law and order in international economic relations:

  • The IMF to promote macroeconomic stability,
  • The GATT (and its successor, the WTO) to ensure an open trading environment, and
  • The World Bank to provide development finance for poverty reduction.

The smooth operation of this rules-based, US-led global economic architecture contributed to the unprecedented economic growth and worldwide prosperity of the post-WWII period.

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Topics:  Global governance

Tags:  US, China, IMF, global governance, World Bank, multilateralisation, troika

Capital controls in the 21st century

Barry Eichengreen, Andrew K Rose 05 June 2014

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Capital controls are back. The IMF (2012) has softened its earlier opposition to their use. Some emerging markets – Brazil, for example – have made renewed use of controls since the global financial crisis of 2008–2009. A number of distinguished economists have now suggested tightening and loosening controls in response to a range of economic and financial issues and problems. While the rationales vary, they tend to have in common the assumption that first-best policies are unavailable and that capital controls can be thought of as a second-best intervention.

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Topics:  International finance

Tags:  IMF, capital flows, global financial crisis, capital controls, capital, Macroprudential policy

The IMF’s preferred creditor status: Questions after the Eurozone crisis

Susan Schadler 28 April 2014

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Throughout the history of IMF lending, the institution has had preferred creditor status – that is, distressed countries borrowing from the IMF are expected to give priority to meeting their obligations to the IMF over those to other creditors. This status is a defining characteristic of the IMF’s role in financial crises – it provides a high degree of confidence that IMF resources are safe when other creditors face substantial uncertainty about full repayment.

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Topics:  Global crisis Global governance International finance

Tags:  IMF, Eurozone crisis, preferred creditor status

The Ukraine-Russia deal

Charles Wyplosz 24 December 2013

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As the price to deter a westward move of Ukraine, Russia has made an offer that the Ukrainian president has found impossible to turn down, if he ever contemplated seriously tying his country to the EU. This is generally hailed as a master coup by President Putin and a great relief for President Yanukovych. In fact, this coup is likely to end in tears for both countries.

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Topics:  International finance

Tags:  IMF, Ukraine

Smart governance: solutions for today’s global economy

Nemat Shafik 14 December 2013

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Making the case for smart governance

Global economic crises tend to reignite discussions of global governance and international cooperation. This is because crises lay bare the shortcomings of existing international rules and institutions. The recent crisis has been no different.

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Topics:  Global governance

Tags:  IMF, financial crisis, global crisis, global governance

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