Macroeconomics and regulation

Most high-income countries will experience declines in their populations over the next few decades. Some negative consequences of aging are on the horizon: greater fiscal imbalances and risks of economic stagnation. Immigration may by a way for those countries to mitigate the tendency. On the source side of immigration flows, brain drain is a risk. The policy paper presents the case of Japan, a nation that has grappled with the consequences of a declining and aging population fo ...

Depuis 2016, on assiste à une dynamique de création de fonds souverains africains. En 2023, on recense 21 pays et 24 fonds souverains. Sur la seule période 2016-23, celle de la deuxième vague, huit pays vont se doter d’un premier fonds souverain, et d’un deuxième, dans le cas du Maroc, en 2022. Cette étude rappelle tout d’abord l’historique d’une création qui commence, dès 1994, au Botswana, avec le Pula Fund, précisant pour chacun des 24 fonds leur date de création, leur ...

The debate on global value chains (GVCs) has emphasized countries’ contributions to value-added creation. From an intercountry perspective, a new body of research is addingto this debate by studying how subnational regions contribute to the indicators in specific countries. Proper assessment of economic contributions is essential for designing incentive policies. This paper analyzes the role played by the main trading partners of Moroccan regions in local value chains. We use input- ...

A 2023 United Nations progress report (UN, 2023) showed that, of the 169 targets that make up the Sustainable Development Goals (SDGs), only 15% are on track, and progress on many has either stalled or regressed. The Water-Energy-Food nexus approach has highlighted the utmost importance of understanding the interconnections between systems in order to accelerate the achievement of the SDGs. In this policy brief, we use the lessons learned from the water sector through a case study f ...

The Belt and Road Initiative (BRI), launched by Xi Jinping, passed its tenth anniversary in 2023. It has entered a third phase. The initiative added a label to China’s financing and construction of infrastructure abroad, which had already totaled more than $400 billion in the previous 10 years. In addition to the use of investment projects as part of Chinese ‘soft power’, the BRI has served to increase levels of usage of the country’s excess installed capacity. China’s economic re ...

This Chapter was originally published on Cape Town Chronicles   The history of debt in Africa is a long and painful one. It began in the 1980s, when the public finances of most developing countries deteriorated following two episodes of oil shocks, leading to a "lost decade" of low growth, increased poverty, and political instability. The recovery from the debt crisis only became possible following initiatives in favour of heavily indebted poor countries (HIPC) and the Multilatera ...

Multiple shocks faced by the global economy over the past three years have apparently shaken the conventional wisdom on gains from economic integration, and have sparked widespread calls for protectionist and nationalist policies. Is there already evidence of some ‘deglobalization’, or do the factors that underlie globalization remain strong enough despite the shocks? So far, there are no signs of an overall reversal in the long-term trend of greater global trade integration. Howev ...

The role of the production network in shock propagation has been an issue of considerable interest since the Great Recession. However, the empirical literature has only focused on advanced and emerging countries. This paper aims to contribute to filling this gap by examining the case of Morocco, a developing country belonging to the lower-middle-income group. The question is whether its production network is a factor in amplifying idiosyncratic industry-level shocks or, conversely, ...

The Brazilian economy is stuck in a so-called middle-income trap—growth that stalled long before Brazil caught up with the living standards of the highly industrialized countries. After exhibiting a stellar performance in the decades before the 1980s, the economy has since been unable to sustain growth for long periods. The predicament can be summarized using a medical analogy: Brazil has been suffering from both productivity anemia and public sector bloat. On the one hand, it hasn ...

The surprising victory of Javier Milei, the unconventional ‘anarcho-capitalist’ candidate, in the August primaries ahead of Argentina’s October 2023 general election, can be largely credited to his commitment to dollarize the Argentine economy, a move perceived as the ultimate solution to bring an end to the nation's economic turmoil. The potential shift from the local currency to the dollar has sparked concerns about Argentina's bilateral currency swap line with China. This swap l ...

Disponible bientôt en vente sur Livremoi   Cette édition du Rapport économique de l’Afrique est construite autour d’une thématique d’une grande actualité : les conséquences des incertitudes et des risques aussi bien sanitaires que climatiques et sécuritaires sur les économies du continent. L’exercice est d’autant plus légitime que la recomposition de l’ordre mondial questionne la place du continent à l’échelle planétaire, sur les plans économique, social et environnemental. L’éco ...

Base erosion and profit shifting (BEPS) involving multinational companies is a complex, multi-dimensional problem resulting from loopholes and inconsistencies between countries’ tax systems. Addressing it requires coordinated action at the international level. Several organizations have taken initiatives in this direction, including the Organization for Economic Co-operation and Development (OECD), which, with the support of the G20, launched an ambitious project to combat BEPS in 2 ...

The COVID-19 pandemic and the war in Ukraine have reignited the debate on efficiency versus resilience in international trade and global value chains (GVCs). This policy brief[a] (i) explains the contrasting perspectives of the private sector (primarily seeking efficiency) and the public sector (aiming for resilience); (ii) demonstrates that GVCs are still flourishing, despite some mounting signals of a geo-fragmentation leading to greater reallocation of the GVCs; and (iii) provide ...

This policy brief was originally published on T20 India website   A decade of poor growth, increased poverty, and political instability followed the serious debt difficulties that emerged worldwide in the 1980s. There are concerns that the looming debt crisis could create similar challenges and result in even more severe consequences. However, the current economic climate differs in many ways from that of the 1980s, when international banks and Paris Club creditors held most of th ...

This Policy Brief examines the current banking crisis in the United States and its implications for Africa. Many studies have pointed out the main factors responsible for this crisis, including poor risk-management practices in the failed banks, the sector’s weak regulatory structure, and the failure of bank supervisors. However, a key factor that has contributed to the extent and speed of the crisis is the U.S. Federal Reserve’s (Fed) policy actions, including the elimination of re ...

The current banking crisis in the United States began with the Silicon Valley Bank (SVB) run in March 2023 and was followed by other bank failures, raising concerns about the health and stability of the financial sector. This Policy Paper traces the root causes of these bank failures and examines the U.S. monetary policy decisions during this period. These bank failures were caused by the poor risk management practices of the failed banks, the sector’s weak regulatory structure, and ...

Earlier this month, U.S. Treasury Secretary Janet Yellen told congressional leaders that the government could run out of cash as early as June 1, if the debt ceiling is not raised in time. In January, the Treasury reached the current legally established ceiling in nominal terms ($31.46 trillion). The funds currently available to make government payment flows tend to exhaust by the end of this month. According to the Treasury Department: “Failing to increase the debt limit would ha ...

Le Policy Center for the New South (PCNS) et le Fonds Monétaire International (FMI) ont organisé, le 28 avril, à Rabat, une table ronde d'experts sur le thème "Fighting Inflation and Building Resilience : the Outlook for MENA and Morocco". Au niveau international, la lutte contre l’inflation constitue la principale préoccupation des politiques économiques dans la majorité des pays. La détection des risques inflationnistes a pris du retard après la crise sanitaire parce que les aut ...

This paper aims to investigate the impact of an inflation targeting framework adoption by the central bank, on the reduction of public debt ratios in emerging countries, through the potential discipline-enhancing effect of inflation targeting on the conduct of fiscal policy in general. The impact evaluation method used is the Propensity Score Matching (PSM), which allows the evaluation of the treatment effect of inflation targeting on fiscal discipline, in terms of public debt reduc ...

Recent initiatives and policy moves by China and other countries to extend the reach of use of the renminbi in the international monetary system, while the U.S. dollar share in global reserves has slightly shrunk in relative terms, have sparked frequent discussions about a hypothetical “de-dollarization” of the global economy. We approach here what that would mean in terms of global currency functions as means of payment and store of value. While we point out a relative decline of ...

The Policy Center for the New South and the Economic Research Forum held on March 20 a workshop titled ‘Stabilization and adjustment towards inclusive and sustainable policies in MENA: The Moroccan case study’. The event took place at the PCNS headquarters in Rabat, Morocco. It brought together renowned Moroccan economists and scholars to discuss the issue of public debt sustainability in the context of the Moroccan economy. It was an occasion to revisit the main features of the Mor ...

Davantage qu'un acte de piété personnelle, le Ramadan est un phénomène éminemment social. Il renvoie à des dimensions complexes : de religion, de solidarité, d’éthique et aussi d’économie. Le jeûne du mois de Ramadan est évidemment l'une des obligations rituelles de l'Islam. Mais, plus que religieux (qui renvoie à l'institutionnalisation et l'objectivation), le Siyam est un fait spirituel (qui renvoie davantage à l’individuation et la subjectivation). Il donne lieu à des prières sur ...

In 2010, when I was one of the vice presidents at the World Bank, colleagues I and published a very upbeat book  about the possibility of emerging and developing economies replacing advanced countries as engines of global economic growth. While the latter would be grappling with the aftermath of the global financial crisis, the former, already growing at a faster pace in the previous decade and accounting for more than half of the annual increases in global GDP, had largely shown an ...

This paper was originally published as a chapter within the Book, Foreign Exchange Constraint and Developing Economies, published on January 2023 (ISBN  978 1 80088 049 8).   The decade after the global financial crisis (GFC) of 2007–2009 saw signifi- cant changes in the volume and composition of capital flows in the global economy. Portfolio investments and other non-bank financial intermediaries (NBFIs) are behind an increasing share of foreign capital flows, while bank- ing flo ...

This Paper was originally published on tandfonline.com   It has been recognised that the fiscal multiplier is a function of structural features of the economy and policy reaction parameters. Moreover, the debate on the magnitude of the multiplier along the business cycle has also been the subject of disputed debates. On these grounds, we look at the Greek case by calibrating a NUTS-2 interregional general equilibrium model using data for distinct states of the Greek economy during ...

Three significant changes to the macroeconomic policy regime in advanced economies, compared to the post-global financial crisis period, have unfolded in the last two years. First, fears of a chronic insufficiency of aggregate demand as a growth deterrent prevailing after the 2008 global financial crisis, have been superseded by supply-side shocks and inflation. Second, as a result of the first change, the era of abundant and cheap liquidity provided by central banks has given way t ...

L’objectif de ce papier est d’essayer d’examiner si l’implémentation du cadre de ciblage de l’inflation par la banque centrale, permet une réduction de la dette publique dans les pays émergents, à travers l'effet disciplinant du ciblage sur la conduite de la politique budgétaire en général. Pour ce faire, la méthode d’évaluation d’impact utilisée est l’appariement par score de propension ou Propensity Score Matching (PSM), qui permet l’évaluation de l’effet de traitement ...

En Afrique, le niveau de la vulnérabilité économique des pays reste élevé et représente un obstacle à la croissance économique et à la réduction de la pauvreté. Ce constat nous mène à étudier cette problématique pour un échantillon des pays africains les plus exposés aux chocs économiques. En effet, ce travail a pour objectif principal d’identifier les effets des composantes des deux indicateurs de vulnérabilité et de résilience économique sur le niveau de reve ...

The US dollar has risen dramatically in value against other currencies recently. Three channels through which factors affecting bilateral exchange rates operate have been pulling up the U.S. dollar: yield differentials, liquidity differentials, and growth differentials. The strong appreciation of the US dollar against other currencies recently reinforced the contractionary pressures present in the global economy. Ultimately, the “turn” or “pivot” of the dollar will most likely occur ...

In the chaotic global post-COVID-19 economy, with the ongoing war in Ukraine, the challenge of adjusting to the global stagflation that is engulfing the world is particularly hard for the oil importing countries of the Middle East and North Africa (MENA) region. A regional commission of experts, working under the auspices of the Economic Research Forum (ERF), and the Finance for Development Lab (FDL), was asked to evaluate the macro-economic risks ahead, and to make recommendations ...

The pandemic has hit Latin America hard, and its economic recovery has been slower than in other regions. In addition to the legacy of higher public indebtedness, the pandemic left scars on the labor market and the human capital formation of future workers. The COVID-19 crisis has receded in Latin America but has left a significant toll. Reported deaths from the pandemic are currently low and converging to global levels. The average excess mortality during the pandemic was among t ...