The euro area (EA) plays a major role in the global economy. Market perceptions of events in the EA program countries illustrate the possibility of large spillovers from the area in times of stress. The prospect of large spillovers underscores the urgent need for actions to contain, and...

This Selected Issues paper examines several real sector issues, including estimates of potential output, the effect of Intel's withdrawal on gross domestic product (GDP), labor market and inequality and electricity prices in Costa Rica. The production function approach shows that the main...

The economic development of Hungary after the economic crisis is discussed. Hungary’s economic program supported by Stand-By Arrangement has been successful in strengthening the economy and stabilizing market conditions. Given Hungary’s high public debt and large financing needs, Executive...

The Chinese authorities welcomed the spillover analysis, noting that their policies have important global spillover effects. The note also discusses China’s evolving role in global trade, impact of rebalancing on the supply chain, estimating China’s spillovers, elasticities approach, factor...

The size of the U.S. economy and, in particular, the global dominance of its financial markets creates uniquely large policy spillovers. Concerns that the end of QE2 could lead to a rapid reversal of emerging market capital flows appear overblown. A credible plan for a gradual U.S. fiscal...

In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country

In this study, the risks related to the euro area sovereign debt crisis are analyzed. Methods used to implement the European Financial Stability Facility (EFSF) are overviewed, and the European Stability Mechanism (ESM), the European Systemic Risk Board (ESRB), and the European Supervisory...

This Selected Issues paper analyzes euro area policies and discusses the implications of the 2007–08 financial sector turbulence for real economic activity. It examines the linkages between the financial and real sectors in the euro area. The paper discusses the European Central Bank’s (ECB)...

To reduce the negative effects of a bank-lending crunch on economic activity, adequate credit provision should be ensured. Further bank recapitalization, restructuring and consolidation of the banking sector, and regulatory reform decisions will reduce uncertainty. A long-lasting configuration...