Read more about the article Growth Implications of a Fractured Trading System

Growth Implications of a Fractured Trading System

An assessment of the implications for growth—particularly the costs—of moving towards a fractured trading system can use as a benchmark what happened during the period of what is usually called hyper-globalization or globalization 2.0 Substantial growth in GDP per capita in emerging markets and developing economies, as well as reductions in poverty rates and lower per capita GDP inequality among countries were major achievements. The transmission channels of the trade fragmentation will be a reversal of the path by which those gains were attained.

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Read more about the article The global economy faces a lost decade

The global economy faces a lost decade

The economic factors that have propelled global prosperity over the past three decades are losing their grip. The aging and slow growth of the global workforce are highlighted as downward factors, explaining half of the expected slowdown in potential GDP growth through 2030. What should countries do in the face of this prospect of a “lost decade”?

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Read more about the article The Middle-Income Trap

The Middle-Income Trap

The “middle-income trap” has become a broad designation trying to capture the many cases of developing countries that succeeded in evolving from low- to middle-levels of per capita income, but then appeared to stall, losing momentum along the route toward the higher income levels of advanced economies. We need to approach middle-income countries as being in a complex transition phase between accumulation and innovation-based economies. Individual middle-income country experiences of falling into a “trap” may be approached as cases of lack of or failing performance in footing the bill in terms of appropriate policies and institutions.

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Read more about the article Brazil must hold to structural reforms while undergoing slow economic recovery

Brazil must hold to structural reforms while undergoing slow economic recovery

Brazil's economic recovery after the deep 2015-16 recession has been the slowest on record, with GDP per capita last year remaining more than 9% below its pre-crisis peak. The IMF's annual report on the country's economy, released two weeks ago, estimated current GDP to be nearly 4% below its potential level, which suggests insufficiency of aggregate demand. On the other hand, as the slow recovery reflects structural factors, it is necessary to avoid the use of measures to reinforce such demand that might run against the confrontation of such problems.

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Read more about the article Natural wealth and economic growth – the case of sub-Saharan Africa

Natural wealth and economic growth – the case of sub-Saharan Africa

This note approaches the relationship between natural wealth and economic growth, using the case of Sub-Sahara African economies as an illustration. Delving into recent World Bank reports, it highlights how a sustained positive correlation between natural capital and GDP growth happens through the transformation of the former into other forms of assets: produced capital, human capital and other intangible assets. Governance features and the quality of macroeconomic policies are of the essence for such a benign trajectory to take place.

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Read more about the article China’s Rebalancing Act is Slowly Addressing Sliding Growth Figures
SAO PAULO, SP, BRASIL, 22-11-2016: Entrevista com Otaviano Canuto, diretor do Banco Mundial (Foto: Fabio Braga/Folhapress, MERCADO)***EXCLUSIVO***.

China’s Rebalancing Act is Slowly Addressing Sliding Growth Figures

  Capital Finance International (Spring, 2019) China’s economic growth has been sliding since 2011, while its economic structure has gradually rebalanced toward lower dependence on investments and current-account surpluses. Steadiness…

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Read more about the article Traps on the Road to High Income

Traps on the Road to High Income

This note outlines two different ways in which the concept has been approached since its first use 12 years ago by Gill and Kharas (2007). One has been empirical, where search is made to identify – or deny - breaks or turning points in time-series data exhibiting “growth traps” for middle-income economies. The other one, closer to the way it was originally suggested, refers to the need of policy and institutional change for a country to keep climbing the income ladder after a transition from low levels. Traps are seen as shortcomings resulting from the absence of any of those policy and institutional changes considered key to gearing up the transition from middle- to upper-income levels.

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Read more about the article China’s Growth Rebalance with Downslide

China’s Growth Rebalance with Downslide

China’s economic growth has been in a downslide trend since 2011, while its economic structure has gradually rebalanced toward lower dependence on investments and current-account surpluses. Steadiness in that trajectory has been accompanied by rising levels of domestic private debt, as well as slow progress in rebalancing private and public sector roles. As the ongoing trade war with the US continues to unfold, it remains unclear at which growth pace China’s rebalancing will tend to settle.

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Read more about the article Overlapping Globalizations

Overlapping Globalizations

Current technological developments in manufacturing are likely to lead to a partial reversal of the wave of fragmentation and global value chains that was at the core of the rise of North-South trade from 1990 onward. At the same time, China – the main hub of the global-growth-cum-structural-change of that period – may attempt to extend the previous wave through its One Belt, One Road initiative.

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