The International Monetary Fund has backed economists who argue that inequality is a drag on growth in a discussion paper that has also dismissed rightwing theories that efforts to redistribute incomes are self-defeating. The Washington-based organisation, which advises governments on sustainable growth, said countries with high levels of inequality suffered lower growth than nations that distributed incomes more evenly. Backing analysis by the Keynesian economist and Nobel prizewinner Joseph Stiglitz, it warned that inequality can also make growth more volatile and create the unstable conditions for a sudden slowdown in GDP growth. And in what is likely to be viewed as its most controversial conclusion, the IMF said analysis of various efforts to redistribute incomes showed they had a neutral effect on GDP growth. This last point is expected to dismay rightwing politicians who argue that overcoming inequality robs the rich of incentives to invest and the poor of incentives to work and … [Read more...] about IMF study finds inequality is damaging to economic growth
Who is international monetary fund
(Corrects paragraph 9 to give figures in nominal terms, not percentages) * Russia to cut dollar share in National Wealth Fund * Russia to add more FX to National Wealth Fund, now at $124.5 bln * Change in FX structure may alter state FX purchases By Elena Fabrichnaya MOSCOW, Nov 7 (Reuters) - Russia is planning to lower the share of the U.S. dollar in its National Wealth Fund, part of its sovereign reserves, as it looks to diversify its foreign currency holdings in 2020, a source at the finance ministry said on Thursday. The change in the fund’s structure, designed to help Russia manage its pension system, may alter the composition of state foreign-currency purchases in the market, the source said. Russia has stepped up a so-called de-dollarisation process to reduce its dependence on the greenback since 2014 when Moscow’s relations with the West deteriorated over Russia’s annexation of Crimea and its role in the Ukrainian crisis. The source at the finance … [Read more...] about CORRECTED-UPDATE 1-Russia to cut dollar share in National Wealth Fund, finance ministry source says
Like many countries, the Greek government relies on borrowed money to balance its books. The recession has made this harder to achieve, because tax revenues are falling just as welfare payments start to rise. It doesn't help that, in Greece, tax evasion is commonplace and pension rights are unusually generous – but, to be fair, using public spending to even out the bumps of the global downturn is what most large developed economies are trying to do right now. Unfortunately, investors have lost confidence in the Greek government's ability to walk this tightrope – so they have been demanding ever higher rates of interest to compensate for the risk that they might not get their money back. The higher its borrowing costs, the harder it is for the Greek economy to grow itself out of trouble. Events began to spiral out of control when credit rating agencies downgraded Greek government debt to "junk" status, pushing the cost of borrowing so high that the country effectively had … [Read more...] about Greek debt crisis: how did the Greek economy get into such a mess?
At the plenary session of the 22nd St. Petersburg International Economic Forum (Photo: VNA) Moscow (VNA) – The plenary session of the 22nd St. Petersburg International Economic Forum (SPIEF-2018), the most important event of the forum, took place in Russia on May 26 under the theme “Creating an Economy of Trust”. Prominent guests include French President Emmanuel Macron, Japanese Prime Minister Shinzo Abe, Chinese Vice President Wang Qishan, and Managing Director of the International Monetary Fund (IMF) Christine Lagarde. Addressing the event, President Vladimir Putin said Russia is always aware that it is part of the global economy. He said competition is inevitable in economy, but countries need to show mutual respect on the basic of constructive and win-win dialogues. French President Emmanuel Macron reiterated that trust plays an important role in the global economy. He admitted that many differences remain between France and Russia, but the two … [Read more...] about St. Petersburg forum looks to create economy of trust
BERLIN (Reuters) - For three decades, China’s burgeoning demand for German cars, machines and engineering tools has been a steady engine of growth for Europe’s largest economy, gratefully championed by successive governments in Berlin. Container ships are loaded at a loading terminal in the port of Hamburg Germany October 28, 2019. Picture taken October 28, 2019. REUTERS/Fabian Bimmer But the engine is starting to splutter. China’s economy is slowing, Donald Trump’s “America First” policies are hurting global trade and China’s factories are becoming rivals to the German giants that once supplied them. The slowdown is not helping at a challenging time for Germany. Its economy contracted 0.1% in the second quarter and some analysts expect third-quarter gross domestic product (GDP) data due on Nov. 14 to show a similar decline - which would leave the economy in recession for the first time since 2013. While German trade with China is … [Read more...] about Germany’s Chinese growth engine stalls