The evidence about the effect of bribery on economic growth is mixed. Some find it harmful while others believe it helps via a ‘grease the wheels’ effect. This column argues that the ambiguity can be explained by divergent effects of the mean and dispersion of corruption. A high bribery-mean retards productivity growth of firms, but a high bribery-dispersion facilitates performance of weak firms.
China’s export-led growth has coincided with the country becoming one of the largest net global creditors. This column looks ahead to the next chapter of Chinese ‘outwards mercantilism’ – FDI investment in natural resources, commodities and mining bundled with access to finance and the export of Chinese capital products and labour services.
The financial system – especially banks – is generally blamed for the Great Recession. This notion has been used to justify the adoption by central banks of several new monetary policy functions, such as financial stability and macro-prudential policies. This column argues that the financial crisis was just one component of the Great Recession and that central banks are largely responsible, given their failure to prevent banks’ liquidity difficulties from overflowing into the economy. It suggests that central banks should pay attention to stabilising monetary policy and scale back the new policies of direct regulation.
In order to achieve sustainable growth, Japan should make an efficient use of its labour force. However, female labour force participation and the share of women in leading positions in Japan remain low. This column investigates the impact of board diversity on firms’ innovative activity using Japanese firm-level data. The findings suggest that board diversity is associated with innovation only for firms that have already acquired diverse management skills.
Complex forces are shaping macroeconomic evolutions around the world. In this column, IMF’s Chief Economist Olivier Blanchard describes some of these forces and provides an overview of the state of the world economy. Putting the forces together, the baseline forecasts are that advanced countries will do better this year than last, and emerging countries will slow down. Overall, the global growth will be roughly the same as last year, with the macroeconomic risks having slightly decreased.
Other Recent Columns:
- Insurance in extended families
- Tilting the playing field: Multinational firms and preferential market access
- Asymmetric information and imperfect competition in lending markets
- Workers’ earnings risks: Evidence from 200 million observations
- Commodity booms and busts: Evidence from 1900 to 2015
- Measuring public panic in the Great Financial Crisis
- The coming defaults of Greece
- The effects of top tax rates on superstar inventors
- Good and bad news coverage: Typhoid in the 1900s
- Central bankers as supervisors: The bandwagon effect
- Why risk is hard to measure
- Female executives and gender wage gaps
- Lenders’ incentives to avoid fire sales
- The preferences of FOMC members
- Secular Stagnation in the US
- Debt supercycle, not secular stagnation
- Value vs growth stocks in normal and crisis times
- Basel’s countercyclical capital buffer: The third nation issue
- Rethinking macroeconomic policy: Introduction
- The role of trade credit financing in international trade