Economic Monitoring - World Bank Group

The World Bank's Prospects Group conducts in-depth analysis of key global macroeconomic developments and their impact on World Bank member countries. WorkingforaWorldFreeofPoverty Research&Outlook BRIEF EconomicMonitoring TheWorldBank'sProspectsGroupconductsin-depthanalysisofkeyglobalmacroeconomicdevelopmentsandtheirimpactonWorldBankmembercountries.TheProspectsGroupleadstheWorldBank’sforecastingworkandproducesthesemi-annualGlobalEconomicProspectsflagshipreport.ItalsoproducestheCommodityMarketsOutlook,policy-relevantresearchontopicalissues,andtimelyupdatesonglobaleconomicdevelopments. Periodicals GlobalEconomicProspects-Januaryissue GlobalEconomicProspects-Januaryissue Thissemi-annualreportanalyzeseconomicdevelopmentsandprospectsglobally,regionally,andnationally.Eacheditioncontainsspecialfocusreportsoneconomicdevelopmentsrelevanttopolicy-makingandplanning. GlobalMonthlyNewsletter-Februaryissue GlobalMonthlyNewsletter-Februaryissue Ananalysisofmajortrendsaffectingtheglobaleconomy.Highlightsimportantdatapointsandanalyzesanimportantcurrenttopic. CommodityMarketsOutlook-Octoberissue CommodityMarketsOutlook-Octoberissue Marketanalysisofmajorcommoditygroups--energy,metals,agriculture,preciousmetals,andfertilizers.Thereportprovidespriceforecastsfor46keycommodities,includingoil. TheLongShadowofInformality:ChallengesandPolicies TheLongShadowofInformality:ChallengesandPolicies Thisstudyisthefirstcomprehensiveanalysisoftheextentofinformalityanditsimplicationsforadurableeconomicrecoveryandforlong-termdevelopment. GlobalProductivity:Trends,Drivers,andPolicies GlobalProductivity:Trends,Drivers,andPolicies Thisbookpresentsthefirstcomprehensiveanalysisoftheevolutionanddriversofproductivitygrowth,examinestheeffectsofCOVID-19onproductivity,anddiscussesawide-rangeofpolicyoptions. GlobalWavesofDebt GlobalWavesofDebt Thisbookpresentsthefirstin-depthanalysisofthemainfeaturesofglobalandnationaldebtaccumulationepisodes,analyzesthelinkagesbetweendebtaccumulationandfinancialcrises,anddrawspolicylessons. ADecadeAftertheGlobalRecession ADecadeAftertheGlobalRecession Thisbookprovidesthefirstcomprehensivestock-takingofthedecadesincetheglobalrecessionfromtheperspectiveofemergingmarketanddevelopingeconomies. InflationinEmergingandDevelopingEconomies InflationinEmergingandDevelopingEconomies Thebookprovidesthefirstcomprehensiveandsystematicanalysisofinflationinemergingmarketanddevelopingeconomies. ProspectGroupPolicyResearchWorkingPapers--RecentIssues Archive(2004-) |ViewbyAuthor WhatHasBeentheImpactofCOVID-19onDebt?TurningaWaveintoaTsunami(November2021) ThispaperpresentsacomprehensiveanalysisoftheimpactofCOVID-19ondebt,putsrecentdebtdevelopmentsandprospectsinhistoricalcontext,andanalyzesnewpolicychallengesassociatedwithdebtresolution.Thepaperreportsthreemainresults.First,evenbeforethepandemic,arapidbuildupofdebtinemergingmarketanddevelopingeconomies—dubbedthe“fourthwave”ofdebt—hadbeenunderway.Becauseofthesharpincreaseindebtduringthepandemic-inducedglobalrecessionof2020,thefourthwaveofdebthasturnedintoatsunamiandbecomeevenmoredangerous.Second,fiveyearsafterpastglobalrecessions,globalgovernmentdebtcontinuedtoincrease.Inlightofthishistoricalrecord,andgivenlargefinancinggapsandsignificantinvestmentneedsinmanycountries,debtlevelswilllikelycontinuetoriseinthenearfuture.Third,debtresolutionhasbecomemorecomplicatedbecauseofahighlyfragmentedcreditorbase,alackoftransparencyindebtreporting,andalegacystockofgovernmentdebtwithoutcollectiveactionclauses.Nationalpolicymakersandtheglobalcommunityneedtoactrapidlyandforcefullyensurethatthefourthwavedoesnotendwithastringofdebtcrisesinemergingmarketanddevelopingeconomiesasearlierdebtwavesdid. WhatTypesofCapitalFlowsHelpImproveInternationalRiskSharing? (November2021) Cross-bordercapitalflowsareexpectedtoleadtoincreasedinternationalrisksharingbyfacilitatingborrowingandlendinginglobalfinancialmarkets.Thispaperexaminesrisk-sharingoutcomesofvarioustypesofcapitalflows(foreigndirectinvestment,portfolioequity,debt,remittance,andaidflows)inalargesampleofemergingmarketanddevelopingeconomies.Theresultssuggestthatremittancesandaidflowsareassociatedwithincreasedinternationalrisksharing.Othertypesofcapitalflowsarenotconsistentlycorrelatedwithbetterrisk-sharingoutcomes.Thesefindingsarerobusttotheuseofdifferenteconometricspecifications,country-specificcharacteristics,andothercontrols. AMountainofDebt:NavigatingtheLegacyofthePandemic(October2021) TheCOVID-19pandemichastriggeredamassiveincreaseinglobaldebtlevelsandexacerbatedthetrade-offsbetweenthebenefitsandcostsofaccumulatinggovernmentdebt.Thispaperexaminesthesetrade-offsbyputtingtherecentdebtboomintoahistoricalcontext.Itreportsthreemajorfindings.First,duringthe2020globalrecession,bothglobalgovernmentandprivatedebtlevelsrosetorecordhighs,andattheirfastestsingle-yearpace,infivedecades.Second,thedebt-financed,massivefiscalsupportprogramsimplementedduringthepandemicsupportedactivityandillustratedthebenefitsofaccumulatingdebt.However,astherecoverygainstraction,thebalanceofbenefitsandcostsofdebtaccumulationcouldincreasinglytilttowardcosts.Third,morethantwo-thirdsofemergingmarketanddevelopingeconomiesarecurrentlyingovernmentdebtbooms.Onaverage,thecurrentboomshavealreadylastedthreeyearslonger,andareaccompaniedbyaconsiderablylargerfiscaldeterioration,thanearlierbooms.Abouthalfoftheearlierdebtboomswereassociatedwithfinancialcrisesinemergingmarketanddevelopingeconomies. TheAftermathofDebtSurges(September2021) Debtinemergingmarketanddevelopingeconomies(EMDEs)isatitshighestlevelinhalfacentury.Inaboutnineoutof10EMDEs,debtishighernowthanitwasin2010and,inhalfoftheEMDEs,debtismorethan30percentagepointsofgrossdomesticproducthigher.Historically,elevateddebtlevelsincreasedtheincidenceofdebtdistress,particularlyinEMDEsandparticularlywhenfinancialmarketconditionsturnedlessbenign.Thispaperreviewsanencompassingmenuofoptionsthathave,inthepast,helpedlowerdebtburdens.Specifically,itexaminesorthodoxoptions(enhancinggrowth,fiscalconsolidation,privatization,andwealthtaxation)andheterodoxoptions(inflation,financialrepression,debtdefaultandrestructuring).Themixoffeasibleoptionsdependsoncountrycharacteristicsandthetypeofdebt.However,noneoftheseoptionscomeswithoutpolitical,economic,andsocialcosts.Someoptionsmayultimatelybeineffectiveunlessvigorouslyimplemented.Policyreversalsindifficulttimeshavebeencommon.Thechallengesassociatedwithdebtreductionraisequestionsofglobalgovernance,includingtowhatextentadvancedeconomiescancasttheirnetwidertocushionprospectiveshockstoEMDEs. One-StopSource:AGlobalDatabaseofInflation (July2021) Thispaperintroducesaglobaldatabasethatcontainsinflationseries:(i)forawiderangeofinflationmeasures(headline,food,energy,andcoreconsumerpriceinflation;producerpriceinflation;andgrossdomesticproductdeflatorchanges);(ii)atmultiplefrequencies(monthly,quarterlyandannual)foranextendedperiod(1970–2021);and(iii)foralargenumber(upto196)ofcountries.Asitdoublesthenumberofobservationsoverthenext-largestpubliclyavailablesources,thedatabaseconstitutesacomprehensive,singlesourceforinflationseries.Thepaperillustratesthepotentialuseofthedatabasewiththreeapplications.First,itstudiestheevolutionofinflationsince1970anddocumentthebroad-baseddisinflationaroundtheworldoverthepasthalf-century,withglobalconsumerpriceinflationdownfromapeakofroughly17percentin1974to2.5percentin2020.Second,itexaminesthebehaviorofinflationduringglobalrecessions.Globalinflationfellsharply(onaverageby0.9percentagepoints)intheyeartothetroughofglobalrecessionsandcontinuedtodeclineevenasrecoveriesgotunderway.In2020,inflationdeclinedless,andmorebriefly,thaninanyofthepreviousfourglobalrecessionsoverthepast50years.Third,thepaperanalyzestheroleofcommonfactorsinexplainingmovementsindifferentmeasuresofinflation.While,acrossallinflationmeasures,inflationsynchronizationhasrisensincetheearly2000s,ithasbeenmuchhigherforinflationmeasuresthatinvolvealargershareoftradablegoods. NeutralRealInterestRatesinInflationTargetingEmergingandDevelopingEconomies(June2021) Withcloseto30emergingmarketanddevelopingeconomies(EMDEs)usinginflationtargetingtodeterminemonetarypolicy,andmanyofthemforover15years,itispossibletocreateameaningfulmeasureofneutralrealinterestratesintheseeconomies.Theneutralrealinterestrateprovidespolicymakerswithabenchmarkfortheinterestrateatwhicheconomicactivityreachesitsfullpotentialandinflationwillstabilize.Thedeviationofpolicyratesfromthisneutralratedetermineswhethermonetarypolicyisaccommodativeorrestrictive.Thispaperprovidesaggregateestimatesoftheneutralratein20oftheseeconomies.EMDEshaveseenadeclineintheneutralrateof4percentagepoints,fromover6percentin2000tocloserto2percentattheendof2019;advancedeconomiessawanabove2percentagepointdeclineoverthisperiod.ThedeclineofneutralrealinterestratesinEMDEscanonlypartiallyberelatedtodomesticdriversofdesiredsavingsandinvestment.TheseculardeclineintheneutralrateofinterestislimitingtheabilityofEMDEstostimulateeconomiesinthefaceoflargeshocks.Theneutralrealinterestrateisunobservableandsubjecttoahighdegreeofuncertainty,doublethesizeofthatforadvancedeconomies.Withsuchhighuncertaintydeterminingthestanceofmonetarypolicyintheseeconomiesisachallenge. ProjectingtheEconomicConsequencesoftheCOVID-19Pandemic (March2021) ThehighlyuncertainevolutionoftheCOVID-19pandemic,influencedinpartbygovernmentactions,socialbehavior,andvaccine-relateddevelopments,willplayacriticalroleinshapingtheglobalrecovery’sstrengthanddurability.Thispaperdevelopsamodelingapproachtoembedpandemicscenariosandtherolloutofavaccineinamacroeconometricmodelandillustratestheimpactofdifferentpandemic-andvaccine-relatedassumptionsongrowthoutcomes.Thepandemicandthemeasurestocontainit,includingvaccinedeployment,areassumedtoberepresentedbyconsumptionshocksinamacroeconometricmodel.Inthebaselinescenario,socialdistancingandagradualvaccinationprocessallowpolicymakerstomakesignificantinroadsincontainingthepandemic.Inadownsidescenario,insufficientpandemiccontroleffortsaccompaniedbydelayedvaccinationleadstopersistentlyhigherinfectionlevelsandamateriallyworsegrowthoutcome.Incontrast,inanupsidescenario,effectivemanagementofthepandemiccombinedwithrapidvaccinedeploymentwouldsetthestageforstrongergrowthoutcomes. TheTechnology-EmploymentTrade-Off:Automation,Industry,andIncomeEffects(January2021) Newtechnologiescanbothsubstituteforandcomplementlabor.Evidencefromstructuralvectorautoregressionsusingalargeglobalsampleofeconomiessuggeststhatthesubstitutioneffectdominatesintheshort-runforoverthree-quartersofeconomies.Atypical10percenttechnology-drivenimprovementinlaborproductivityreducesemploymentby2percentinadvancedeconomiesinthefirstyearand1percentinemergingmarketanddevelopingeconomies(EMDEs).Advancedeconomieshavebeenmoreaffectedbyemployment-displacingtechnologicalchangeinrecentdecadesbutthedisruptiontothelabormarketinEMDEshasbeenmorepersistent.Thenegativeemploymenteffectislargerandmorepersistentineconomiesthathaveexperiencedalargerincrease,orsmallerfall,inindustrialemploymentsharessince1990.Incontrast,economieswhereworkershavebeenbetterabletotransitiontoothersectorshavebenefitedmoreinthemediumrunfromthepositive"incomeeffect''ofnewtechnologies.Thiscorrespondswithexistingevidencethatindustrialjobsaremostatriskofautomationandreduced-formevidencethatmoreindustrially-focusedeconomieshavetendedtocreatefewerjobsinrecentdecades.EMDEsarelikelytofaceincreasingchallengesfromautomationastheirshareofglobalindustryandproductioncomplexityincreases. TechnologyandDemandDriversofProductivityDynamicsinDevelopedandEmergingMarketEconomies(January2021) Frequently,factorsotherthanstructuraldevelopmentsintechnologyandproductionefficiencydrivechangesinlaborproductivityinadvancedandemergingmarketanddevelopingeconomies(EMDEs).Thispaperusesanewmethodtoextracttechnologyshocksthatexcludestheseinfluences,resultinginlastingimprovementsinlaborproductivity.Thesamemethodologyinturnisusedtoidentifyastylizedexampleoftheeffectsofademandshockonproductivity.TechnologyinnovationsareaccompaniedbyhigherandmorerapidlyincreasingratesofinvestmentinEMDEsrelativetoadvancedeconomies,suggestingthatpositivetechnologicaldevelopmentsareoftencapital-embodiedintheformereconomies.EmploymentfallsinbothadvancedeconomiesandEMDEsfollowingpositivetechnologydevelopments,withtheeffectsmallerbutmorepersistentinEMDEs.Uncorrelatedtechnologicaldevelopmentsacrosseconomiessuggestthatglobalsynchronizationoflaborproductivitygrowthisduetocyclical(demand)influences.DemanddriversoflaborproductivityarefoundtohavehighlypersistenteffectsinEMDEsandsomeadvancedeconomies.Unliketechnologyshocks,however,demandshocksinfluencelaborproductivityonlythroughthecapitaldeepeningchannel,particularlyineconomieswithlowcapacityforcounter-cyclicalfiscalpolicy.Overall,non-technologicalfactorsaccountedformostofthefallinlaborproductivitygrowthduring2007-08andaroundone-thirdofthelonger-termproductivitydeclineaftertheglobalfinancialcrisis. Fulllistofworkingpapers LastUpdated: Mar18,2022 EconomicMonitoring ProspectsGroupAnalysis SelectedtopicsfromtheWorldBank’sGlobalEconomicProspectsflagship,CommodityMarketsOutlook,andotherpublications.Analyticalpiecessince2015. PolicyResearchWorkingPapers ThesepapersarepartofalargereffortbytheWorldBanktoprovideopenaccesstoitsresearchandcontributetodevelopment-policydiscussionsaroundtheworld. Archive-GlobalEconomicProspects ThisWorldBankGroupflagshipreportexaminesglobaleconomicdevelopmentsandprospects,withaspecialfocusonemergingmarketanddevelopingeconomies.Availablesince1991. Archive-GlobalMonthlyNewsletter Receiveamonthlyreportonglobaleconomicandfinancialdevelopments.Tosubscribe,[email protected]. ResearchandPolicyBriefNo.47 DemandandSupplyDynamicsinEastAsiaduringtheCOVID-19Recession GlobalDatabaseofInflation Thisglobaldatabaseoninflationcoversupto196countriesovertheperiod1970-2021,andincludessixmeasuresofinflationinthreefrequencies(annual,quarterly,andmonthly). Website InformalEconomyDatabase Thisglobaldatabaseofinformaleconomicactivityincludesupto196economiesovertheperiod1990-2018andincludesthetwelvemostcommonlyusedmeasuresofinformaleconomy. Website FiscalSpaceData Thiscross-countrydatabaseonfiscalspacecovers202countriesovertheperiod1990-2020,andincludes28indicatorsoffiscalspace. Website CommodityPriceData Monthlyandannualcommoditypricedataandindexessince1960.Semi-annualreportalsoavailable. Website MacroeconomicData(GEM) Monthlyandannualdatasince1990onexchangerates,equitymarkets,interestrates,anddebtmarkets,aswellasmonthlydataonconsumerprices,industrialproduction,andmerchandisetrade. Download ContactUs email [email protected] Welcome Youhaveclickedonalinktoapagethatisnotpartofthebetaversionofthenewworldbank.org.Beforeyouleave,we’dlovetogetyourfeedbackonyourexperiencewhileyouwerehere.Willyoutaketwominutestocompleteabriefsurveythatwillhelpustoimproveourwebsite? 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