World Economic Outlook
Globalization and Inequality
October 2007
The World Economic Outlook (WEO) presents the IMF staff's analysis and projections of economic developments at the global level, in major country groups (classified by region, stage of development, etc.), and in many individual countries. It focuses on major economic policy issues as well as on the analysis of economic developments and prospects. It is usually prepared twice a year, as documentation for meetings of the International Monetary and Financial Committee, and forms the main instrument of the IMF's global surveillance activities. |
View the Full Text of the WEO (use the free Adobe Acrobat Reader).
Contents
| Assumptions and Conventions | |||
Preface |
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Foreword (Data) |
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Executive Summary |
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| Chapter 1. Global Prospects and Policy Issues | |||
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| Full Text | Video Briefing | Boxes | Figures | |||
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Strong Global Growth Is Being Confronted by Turbulent Financial Conditions The Baseline Outlook Has Been Marked Down Moderately—And Downside Risks Have Intensified Living with Heavy Foreign Exchange Inflows Sustaining Robust Growth Policy Challenges Appendix 1.1 Developments in Commodity Markets Appendix 1.2 Climate Change: Economic Impact and Policy Responses References |
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| Chapter 2. Country and Regional Perspectives | |||
| Full Text | Boxes | Figures | |||
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United States and Canada: Uncertainties About the U.S. Outlook Have Risen Western Europe: How Resilient Is the Recovery? Industrial Asia: Deflation Is Not Yet Decisively Beaten in Japan Emerging Asia: Successfully Managing Strong Foreign Exchange Inflows Latin America—Responding to Surging Foreign Exchange Inflows Emerging Europe: Brisk Activity, Rising Imbalances Commonwealth of Independent States: Tensions Between Inflation and Exchange Rate Objectives Sub-Saharan Africa—Benefiting from Globalization Middle East: Balancing Cyclical and Long–Term Considerations in Fiscal Policy References |
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| Chapter 3. Managing Large Capital Inflows | |||
| Full Text | Summary | Video Briefing | Boxes | Figures | |||
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Two Waves of Large Capital Inflows to Emerging Markets Identifying Episodes of Large Capital Inflows Policy Responses to Large Capital Inflows Linking Macroeconomic Outcomes and Policy Responses Conclusions Appendix 3.1. Event Analysis and Policy Indices: Methodologies and Data References |
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| Chapter 4. Globalization and Inequality | |||
| Full Text | Summary | Video Briefing | Boxes | Figures | |||
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Recent Trends in Inequality and Globalization What Is the Impact of Globalization on Inequality? An Empirical Investigation of Globalization and Inequality Conclusions and Policy Implications Appendix 4.1. Data Sources and Methods References |
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| Chapter 5. The Changing Dynamics of the Global Business Cycle | |||
| Full Text | Summary | Video Briefing | Boxes | Figures | |||
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Global Business Cycles: A Historical Perspective Has the World Economy Become More Stable? What Is Driving the Moderation of the Global Business Cycle? Conclusions Appendix 5.1. Data and Methods References |
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| Annex: IMF Executive Board Discussion of the Outlook, September 2007 | |||
| Statistical Appendix | |||
| Assumptions | |||
| What's New | |||
| Data and Conventions | |||
| Classification of Countries | |||
| General Features and Composition of Groups in the World Economic Outlook Classification |
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| Classification | |||
| List of Tables Part A | |||
| Output (Tables A1–A4) | |||
| Inflation (Tables A5–A7) | |||
| Financial Policies (Table A8) | |||
| Foreign Trade (Table A9) | |||
| Current Account Transactions (Tables A10–A12) | |||
| Balance of Payments and External Financing (Tables A13– A15) |
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| Flow of Funds (Table A16) | |||
| Medium–Term Baseline Scenario (Table A17) | |||
| List of Tables Part B | |||
| Output (Tables B1–B2) | |||
| Inflation (Tables B3–B4) | |||
| Financial Policies (Tables B5–B10) | |||
| Foreign Trade (Tables B11–B13) | |||
| Current Account Transactions (Tables B14–B17) | |||
| Balance of Payments and External Financing (Tables B18–B20) | |||
| External Debt and Debt Service (Tables B21–B25) | |||
| Medium-Term Baseline Scenario (Table B26) | |||
| World Economic Outlook and Staff Studies for the World Economic Outlook, Selected Topics | |||
| Chapter 1 Boxes | |||
| Data Data |
1.1 | Who Is Harmed by the Surge in Food Prices? | |
| Data Data |
1.2 | Macroeconomic Implications of Recent Financial Market Turmoil: Patterns from Previous Episodes | |
| 1.3 | Multilateral Consultation on Global Imbalances | ||
| Data Data |
1.4 | What Is Global Liquidity? | |
| Data | 1.5 | Refinery Bottlenecks | |
| Data | 1.6 | Making the Most of Biofuels | |
| 1.7 | The Discounting Debate | ||
| 1.8 | Taxes Versus Quantities Under Undertainty (Weitzman, 1974) | ||
| 1.9 | Experience with Emissions Trading in the European Union | ||
| Chapter 2 Boxes | |||
| Data Data |
2.1 | What Risks Do Housing Markets Pose for Global Growth? | |
| Data | 2.2 | Labor Market Reforms in the Euro Area and the Wage–Unemployment Trade–Off | |
| Data | 2.3 | Managing the Macroeconomic Consequences of Large and Volatile Aid Flows | |
| Chapter 3 Boxes | |||
| Data Data |
3.1 | Can Capital Controls Work? | |
| Chapter 4 Boxes | |||
| 4.1 | Measuring Inequality: Conceptual, Methodological, and Measurement Issues | ||
| Data | 4.2 | What Do Country Studies of the Impact of Globalization on Inequality Tell Us? Examples from Mexico, China, and India | |
| Chapter 5 Boxes | |||
| 5.1 | Major Economies and Fluctuations in Global Growth | ||
| Data | 5.2 | Improved Macroeconomic Performance—Good Luck or Good Policies? | |
| Data | 5.3 | New Business Cycle Indices for Latin America: A Historical Reconstruction | |
| Appendix Boxes | |||
| A.1 | Economic Policy Assumptions Underlying the Projections for Selected Economies | ||
| Tables | |||
| 1.1 | Overview of the World Economic Outlook Projections | ||
| 1.2 | Global Oil Demand by Region | ||
| 2.1 | Advanced Economies: Real GDP, Consumer Prices, and Unemployment | ||
| 2.2 | Advanced Economies: Current Account Positions | ||
| 2.3 | Selected Asian Countries: Real GDP, Consumer Prices, and Current Account Balance | ||
| 2.4 | Selected Western Hemisphere Countries: Real GDP, Consumer Prices, and Current Account Balance | ||
| 2.5 | Emerging Europe: Real GDP, Consumer Prices, and Current Account Balance | ||
| 2.6 | Commonwealth of Independent States: Real GDP, Consumer Prices, and Current Account Balance | ||
| 2.7 | Selected African Countries: Real GDP, Consumer Prices, and Current Account Balance | ||
| 2.8 | Selected Middle Eastern Countries: Real GDP, Consumer Prices, and Current Account Balance | ||
| 3.1 | Episodes of Large Net Private Capital Inflows—Summary Statistics | ||
| 3.2 | Post–Inflow GDP Growth Regressions | ||
| 3.3 | Real Exchange Rate Regressions | ||
| 3.4 | List of Net Private Capital Inflow Episodes | ||
| 4.1 | Determinants of the Gini Coefficient, Full Sample | ||
| 4.2 | Estimation of the Benchmark Model Using Quintiles' Income Shares, Full Sample | ||
| 4.3 | Determinants of the Gini Coefficient, Regional Heterogeneity | ||
| 5.1 | Cross–Sectional Regressions | ||
| 5.2 | Panel and Probit Regressions | ||
| Chapter 1 Figures | |||
| Data | 1.1 | Global Indicators | |
| Data | 1.2 | Global Inflation | |
| Data | 1.3 | Developments in Mature Credit Markets | |
| Data | 1.4 | Mature Financial Market Indicators | |
| Data | 1.5 | Emerging Market Financial Conditions | |
| Data | 1.6 | External Developments in Selected Advanced Economies | |
| Data | 1.7 | External Developments in Emerging Market and Developing Countries | |
| Data | 1.8 | Global Outlook | |
| Data | 1.9 | Current and Forward-Looking Indicators | |
| Data | 1.10 | Risks to the Global Outlook | |
| Data | 1.11 | Measures of the Output Gap and Capacity Pressures | |
| Data | 1.12 | Productivity and Labor Cost Developments in Selected Advanced Economies | |
| Data | 1.13 | Current Account Balances and Net Foreign Assets | |
| Data | 1.14 | Simulated Effect of a Financial Disturbance on the Global Economy | |
| Data | 1.15 | Private Capital Flows to Emerging Markets | |
| Data | 1.16 | Current and Capital Account Flows to Selected Emerging Market and Developing Countries | |
| Data | 1.17 | Perspectives on Global Growth | |
| Data | 1.18 | Commodity Price Indices | |
| Data | 1.19 | Crude Oil and Gasoline Prices | |
| Data | 1.20 | Developments in Oil Consumption and Production | |
| Data | 1.21 | Inventories and OPEC Production | |
| Data | 1.22 | Oil Futures Prices, and Selected Energy and Metal Prices | |
| Data | 1.23 | Sources of Demand and Prices of Selected Fuel–Related Food Items | |
| Data | 1.24 | Greenhouse Gas Emissions by Region | |
| Data | 1.25 | Actual and Projected Fuel–Related Carbon Emissions Under “Business-as-Usual” | |
| Data | 1.26 | Time Profile of Aggregate Damages from Climate Change | |
| Data | 1.27 | Mean per Capita GDP losses at Different Levels of Warming | |
| Data | 1.28 | Greenhouse Gas Emission Paths Consistent with Alternative Concentration Targets | |
| Data | 1.29 | Greenhouse Gas Emissions, Kyoto Targets, and Predicted Emissions | |
| Chapter 2 Figures | |||
| Data | 2.1 | United States: Indicators of Investment | |
| Data | 2.2 | Western Europe: What Is the Outlook for Inflation? | |
| Data | 2.3 | Japan: Deflation Still Not Decisively Beaten | |
| Data | 2.4 | Emerging Asia: Managing Strong Foreign Exchange Inflows | |
| Data | 2.5 | Latin America: Capital Inflows Are Complicating Macroeconomic Management | |
| Data | 2.6 | Emerging Europe: Rapid Credit Growth Is Fueling Domestic Demand | |
| Data | 2.7 | Commonwealth of Independent States (CIS): Dealing with Capital Inflows | |
| Data | 2.8 | Sub-Saharan Africa: Benefiting from Globalization | |
| Data | 2.9 | Middle East: How Are Oil Revenues Used? | |
| Chapter 3 Figures | |||
| Data | 3.1 | Net Private Capital Inflows to Emerging Markets | |
| Data | 3.2 | Gross Private Flows, Current Account Balance, and Reserve Accumulation | |
| Data | 3.3 | Current Account Balance, Private Capital Inflows, and Reserve Accumulation by Region | |
| Data | 3.4 | Net FDI and Non–FDI Inflows | |
| Data | 3.5 | Characteristics of Episodes of Large Net Private Capital Inflows | |
| Data | 3.6 | Exchange Market Pressure Index | |
| Data | 3.7 | Evolution of Policy Indicators | |
| Data | 3.8 | Policy Indicators in the Episodes of Large Net Private Capital Inflows | |
| Data | 3.9 | Selected Macroeconomic Variables: Averages During, Before, and After Episodes of Large Net Private Capital Inflows | |
| Data | 3.10 | Post-Inflow GDP Growth, Selected Macroeconomic Variables, and Policy Indicators | |
| Data | 3.11 | Real Effective Exchange Rate Appreciation and Policy Responses When Inflation Accelerates | |
| Data | 3.12 | Regional Dimension | |
| Data | 3.13 | Resistance to Exchange Market Pressures and Duration of Capital Inflow Episodes | |
| Data | 3.14 | Fiscal Policy and Balance of Payments Pressures | |
| Data | 3.15 | Mexico: Identification of Large Net Private Capital Inflow Episodes | |
| Chapter 4 Figures | |||
| Data | 4.1 | Trade Globalization | |
| Data | 4.2 | Financial Globalization | |
| Data | 4.3 | Cross–Country Trends in Inequality | |
| Data | 4.4 | Income Shares by Quintile | |
| Data | 4.5 | Per Capita Income by Quintile | |
| Data | 4.6 | Per Capita Income by Quintile in Selected Countries | |
| Data | 4.7 | Inequality Versus Globalization: Selected Countries | |
| Data | 4.8 | Information and Communications Technology (ICT) Capital, Private Credit, Education, and Sectoral Employment Shares | |
| Data | 4.9 | Explaining Gini Coefficient Changes | |
| Data | 4.10 | Decomposition of Globalization Effects on Inequality | |
| Data | 4.11 | Inequality Versus Exports in Agriculture | |
| Data | 4.12 | Foreign Direct Investment Stock by Sector | |
| Data | 4.13 | Inequality and Technology, 1981–2003 | |
| Data | 4.14 | Explaining the Change in Income Share of Top and Bottom Quintiles | |
| Data | 4.15 | Inequality, Import Share from Developing Countries, Inward Debt, and Outward Foreign Direct Investment (FDI), 1981–2003 | |
| Chapter 5 Figures | |||
| Data | 5.1 | World Growth Has Been Strong and Stable | |
| Data | 5.2 | Expansions in Historical Perspective | |
| Data | 5.3 | Recessions in Historical Perspective | |
| Data | 5.4 | Volatility of Growth in the Main World Regions | |
| Data | 5.5 | Decomposition of Changes in World Output Volatility by Region | |
| Data | 5.6 | Decomposition of Changes to World Output Volatility by Expenditure Component | |
| Data | 5.7 | Decomposition of Change in U.S. Output Volatility | |
| Data | 5.8 | Volatility Patterns in Rapidly Growing Economies | |
| Data | 5.9 | Some Determinants of Differences in Business-Cycle Characteristics | |
| Data | 5.10 | Contribution to Outcome Differences | |