Growth in emerging market economies (EMEs) is set to durably slow from the rates observed over 2010-12 as cyclical effects fade, potential growth declines and external financing conditions tighten. Large negative current account balances make some EMEs vulnerable to sudden reversals in capital...

OECD work prior to the financial crisis suggested that real prices in several housing markets had become vulnerable to a change in financial and economic conditions, with the risk of a subsequent downturn becoming increasingly possible, as proved to be the case. With corrections in many, but not...

In many OECD countries, government debt reached levels over recent years that call for reduction over the medium to longer term to ensure public finance sustainability. This paper investigates the international transmission of fiscal consolidation shocks via trade flows. Using a measure of...

This paper documents some features of recent trends in bond yields and discusses the drivers of these trends. This includes a discussion of the relationship between fiscal balances and interest rates -- with a summary of key empirical results from the literature provided in the Appendix. The...

After the launch of the single currency the euro exchange rate fell and interest rates had converged towards the (low) German level. These shocks have worked out differently for the small and large countries. Housing markets have acted as an important vehicle of transmission of these shocks onto...

In this paper the OECD’s interlink model is used to explore several possible channels through which a narrowing of the US current account deficit could occur. The shocks considered include dollar depreciation, fiscal consolidation, and an improvement in the non-price competitiveness of US...

House prices have been moving up strongly in real terms since the mid-1990s in the majority of OECD countries, with the ongoing upswing the longest of its kind in the OECD area since the 1970s. If interest rates were to rise significantly, real house prices may be at risk of nearing a peak. The...

This paper describes the OECD’s new small global forecasting model for the three main OECD economic regions: the United States, the euro area, and Japan. The key variables – which include output, inflation, the trade balance, and import prices – are driven by monetary and fiscal policy,...

Over the past two years, the key trading economies in SE Asia experienced major economic crises, involving financial turbulence, large capital outflows and currency depreciations. These, in turn, resulted in severe financial constraints and business failures and required major domestic...

Social safety nets protect citizens against hardship. By offering compensation, social safety nets may help overcome the political resistance to trade liberalisation and structural reform, but they can also weaken the incentives to work and save. Depending on their design, safety nets may also...