(AGENPARL) – ven 17 febbraio 2023 The latest IMF analysis of global economics, finance, development and policy issues shaping the world. []
[Hero weekend read]
Dear Colleague,
In today’s edition, we highlight:
– America’s economy
– Global tax reform
– The new political order
– Mauritania’s economy
– The housing market
UNITED STATES
(Credit: IMF, Adobe Stock/Tanarch)
The Federal Reserve is raising interest rates to restore price stability and bring balance to the labor market. But with unemployment at 50-year lows, the demand for new hires is exceeding the supply of available workers and this is fueling inflation.
“Although these higher rates will temporarily increase unemployment, they will pave the way for stable inflation and sustainable economic growth, which will ultimately help create more jobs in the future.”
Most Federal Open Market Committee members project further interest rate hikes, so that the federal funds rate would remain around 5–5½ percent at the end of 2023.
There are encouraging signs that the Fed’s policy moves are having the intended impact, but inflation in services prices remains high and is only likely to fall once wage growth slows, Hodge says.
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GLOBAL TAX REFORM
(Credit: Dim Hou/Unsplash)
The international tax system has come under intense pressure in recent years. Globalization, digitalization, and tax competition have made it increasingly hard for countries to raise revenue from multinational companies in an effective, fair and efficient manner.
In 2021 countries agreed to introduce a global minimum effective tax rate of 15 percent and a new method to allocate profits to countries where multinational companies may have significant business but few (or no) local operations.
“While monitoring and evaluation are critical and further reforms likely, the most important next step is for countries to implement it swiftly.”
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FINANCE & DEVELOPMENT
(Credit: IMF / Adobe Stock)
Some moments in US history need decades to be fully grasped—they aren’t bound by the two-, four-, and six-year election cycles. Such periods, called “political orders” by Cambridge professor of American history Gary Gerstle, are a new way of rethinking political time.
The New Deal and the neoliberalism that followed were political orders that shaped US policy—and greatly influenced the global order—from the 1930s to the 2010s.
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CLIMATE CHANGE
(Credit: Tamara Merino/IMF Photos)
People across the world worry about climate change, but that concern alone doesn’t translate into support for climate mitigation policies.
That’s the finding of a recent IMF survey of almost 30,000 people in 28 countries designed to better illustrate how people perceive the risks from climate change and their support for government climate actions.
But, he added, this support may be short-lived if policy tradeoffs are not made explicit, highlighting the importance of ensuring the public understands the relative costs and benefits of available policy options.
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MAURITANIA
[Mauritania]
(Credit: Adobe Stock: hamid chabbi/EyeEm / ????????? ???????? / Overflightstock)
However, these losses can be mitigated, the authors say. Expanding access to electricity could halve the economic losses caused by droughts. A better healthcare system, meanwhile, would limit disease spread after floods and allow affected people to return to work sooner.
SPECIAL FEATURE
The housing market
Our latest Analyze This! video explains the impact of rising interest rates on the housing market.
Weekly Roundup
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Thank you again very much for your interest in the Weekend Read! Be sure to let us know what issues and trends we should have on our radar.
[nick]
Nick Owen
Editor
IMF Weekend Read