A Tale of Two States—Bringing Back U.S. Productivity Growth

By Roberto Cardarelli and Lusine Lusinyan: (Versión en español) Today’s Pop Quiz: What do Oregon and New Mexico have in common? What could possibly link the spectacular vistas of Crater Lake to the glistening White Sands? Answer: One link is these two states have the highest share of computer and electronic production in the entire United States. Think Intel […]

Now Is a Good Time to Invest in Infrastructure

By Abdul Abiad, Davide Furceri, and Petia Topalova: Infrastructure is the backbone of well-functioning economies. Unfortunately, that backbone is becoming increasingly brittle in a number of advanced economies. For example, there has been a decline in the overall quality of infrastructure in the United States and Germany (Figure 1; see the FT 2014 and ASCE 2013 for more in infrastructure in the […]

The Growth of Shadow Banking

By Gaston Gelos and Nico Valckx: Shadow banking has grown by leaps and bounds around the world in the last decade.  It is now worth over $70 trillion. We take a closer look at what has driven this growth to help countries figure out what policies to use to minimize the risks involved. In our analysis, we’ve found […]

In Mozambique—and In Africa—Rising Requires Resilience

By Doris Ross: Three months ago African leaders and policymakers assembled in Mozambique under an “Africa Rising” banner to assess the continent’s strong economic performance. But while the outlook for the continent remains strong, individual countries have faced problems and the uncertain global outlook continues to pose risks. Against this backdrop, what are the policies that […]

Structural Reforms Can Help Japan’s Post-Consumption Tax Blues

By Stephan Danninger: Japan’s GDP declined by almost 7 percent in the second quarter, more than many had forecast including us here at the IMF.  Many cite the increase in the sales tax this April for this decline.  But that is not the full story. Yes, it is true that consumer responses to major tax increases are difficult […]

Can Japan Afford to Cut Its Corporate Tax?

By Ruud de Mooij and Ikuo Saito: (Versions in 日本語) It is no surprise that, as part of its revised growth strategy presented in June, the Japanese government has announced it will reduce the corporate income tax rate. At more than 35 percent for most businesses, the Japanese rate is one of the highest among the industrialized countries of […]

U.S. Labor Force: Where Have All the Workers Gone?

By Ravi Balakrishnan: (Version in Español) It’s not supposed to be this way. As the U.S. economy recovers, hirings increase and people are encouraged to look for jobs again. Instead, the ratio of the adult population with jobs, or looking for one—what’s called the labor force participation rate—has been falling, standing at 62.9 percent in July 2014 (Figure 1). […]

Links and Levers: How the Caucasus and Central Asia Are Tied to Russia

By Alberto Behar: (Version in Русский) The countries of the Caucasus and Central Asia (CCA) are closely linked with Russia through trade, financial, and labor market channels. These ties have served the region well in recent years, helping it make significant economic gains when times were good. But how is the region affected when Russia’s economy slows […]

Europe’s Russian Connections

By Aasim M. Husain, Anna Ilyina and Li Zeng: The conflict in Ukraine and the related imposition of sanctions against Russia signal an escalation of geopolitical tensions that is already being felt in the Russian financial markets (Chart 1). A deterioration in the conflict, with or even without a further escalation of sanctions and counter-sanctions, could have a substantial […]

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