New IMF Global Macrofinancial Model

#FrancisVitek #IMF #Monetary & #Financial #Contagion in the new #IMF #Global #MacroFinancial Model: #AEs modeled as #InflationTargeting Economies; #India & #China as Managed #ExchangeRate regimes. #CapitalMarket & #Interbank #Contagion channels r modeled separately; Via @MacroPru

— Satyen Baindur (@Satyen_Baindur) April 11, 2018

#China taken as Low #Contagion economy both channels; #India taken as High #CapitalMarket #Contagion. #IMF new #Global #Macrofinancial Model, (abbreviated #GFM); parameterized both by #Calibration & #Estimation, #DynamicStochasticGeneralEquilibrium #DSGE; 40 national economies..

— Satyen Baindur (@Satyen_Baindur) April 11, 2018

IMF World Economic Outlook April 2018 - Chapter 2

.@LounganiPrakash “Recessions are not rare,” echoed Prakash Loungani,  a macro-economist at the #IMF. “What is rare is a recession that is forecast in advance.” Despite an increased amount of economic data..., “the ability to predict downturns remains dismal”, he told @FT

— Satyen Baindur (@Satyen_Baindur) April 9, 2018

Inability to explain the #LFPR decline 4 most countries by 'exogenous' effects #Demographics #AgeingPopulation or #Cyclical Effects (#GreatRecession, modest recovery) => role 4 policy interventions – e.g. unemployment benefits, taxes, coordination of wage setting, migration.

— Satyen Baindur (@Satyen_Baindur) April 10, 2018

Difficulty of Economic Growth Forecasting and Data Revisions

.@BEA_News US GDP Growth data Q12015 illustrate both difficulty of forecasting & the multiple revisions data undergo...#IMF April #WEO better than Oct... Economic forecasts shd provide “broad trends, not specific numbers” Mr Donovan @UBS. ht @Went1955 @FT https://t.co/rVXNVVQUQI

— Satyen Baindur (@Satyen_Baindur) April 9, 2018

.@LounganiPrakash “Recessions are not rare,” echoed Prakash Loungani, a macro-economist at the #IMF. “What is rare is a recession that is forecast in advance.” Despite an increased amount of economic data..., “the ability to predict downturns remains dismal”, he told @FT

— Satyen Baindur (@Satyen_Baindur) April 9, 2018

Sovereign GDP-Linked Bonds: Rationale & Design

.@voxeu @cepr_org: 'Sovereign GDP-Linked Bonds: Rationale & Design' (@RobertJShiller #Yale, Maurice Obstfeld #IMF, James Benford @BoE_Research Ed.) 'Despite the recent improvement in global growth, concerns linger of a #SecularStagnation in medium-term...https://t.co/LXsZMhCLTH

— Satyen Baindur (@Satyen_Baindur) March 29, 2018

...prospects and of limited policy space to deal with the next economic downturn...#AE debt exceeds annual output and is at its highest since WWII; #EM debt is rising rapidly...#GDP-linked bonds can increase the #DebtLimit @ which #SovereignDefault occurs, 4 both #AEs & #EMs... pic.twitter.com/3g51DU3n6k

— Satyen Baindur (@Satyen_Baindur) March 29, 2018

...for #AEs, the #DebtLimit increases till all debt is #GDP-linked, but 4 #EMs, the marginal effect on #DebtLimt begins to decline after ~60% debt is #GDP-linked...some caveats apply: #MoralHazard #RiskAppetite etc & the analysis may need 2 b modified 4 cntrys in a #CurrencyUnion

— Satyen Baindur (@Satyen_Baindur) March 29, 2018

A New Paradigm for the Business Cycle - II

Apropos #IMF Working Paper 17/250, which argues 4 a #NewParadigm for the #BusinessCycle, where crises can permanently reduce output (both level and growth rate), here's US #RGDP growth rates 4 each #NBER !#BusinessCycle since 1948 [from the 2018 Economic Report of the President] pic.twitter.com/CdGGQ7npv5

— Satyen Baindur (@Satyen_Baindur) March 23, 2018

US Goods and Services Trade Balance by Country (major trading partners) - the US has a Services trade *Surplus* with all, including #China, with the largest being with the #EU), but the goods trade deficit with #China dwarfs everything else.... pic.twitter.com/xELYV8eoXX

— Satyen Baindur (@Satyen_Baindur) March 23, 2018

New study shows that all types of recessions, including those arising from external shocks, lead to permanent losses in output and welfare. https://t.co/dYdl03J1DS #IMFBlog pic.twitter.com/lNydqYLU1u

— IMF (@IMFNews) March 24, 2018

A New Paradigm for the Business Cycle?

#IMF Working Paper 17/250 argues 4 a #NewParadigm of the '#BusinessCycle'- the #OutputGap can be 'ill-conceived, poorly-measured & inconsistent over time' - output losses can in fact be permanent, depressing both trend and level, w only partial recovery.....via @sdonnan pic.twitter.com/K516WSZQyq

— Satyen Baindur (@Satyen_Baindur) March 21, 2018

The #ParadigmShift upsets #ConventionalWisdom: Since financial crises cause #GrowthRecessions, strong #FinancialRegulation can b pro-#Growth; & #Fiscal #conservatism b4, during & after crises (even if not #austerity) is advisable, 2 decrease chance of high future sovereign debt..

— Satyen Baindur (@Satyen_Baindur) March 22, 2018

And 4 #Monetary policy, the new paradigm argues in favor of making #FinancialStability an explicit part of the mandate, to the extent of #LeaningAgainstTheWind, and even accepting higher inflation & output volatility as a means of decreasing the risk of future #FinancialCrisis...

— Satyen Baindur (@Satyen_Baindur) March 22, 2018

Apropos #IMF Working Paper 17/250, which argues 4 a #NewParadigm for the #BusinessCycle, where crises can permanently reduce output (both level and growth rate), here's US #RGDP growth rates 4 each #NBER !#BusinessCycle since 1948 [from the 2018 Economic Report of the President] pic.twitter.com/CdGGQ7npv5

— Satyen Baindur (@Satyen_Baindur) March 23, 2018

How do Greenhouse Gas Emissions Scale with Real GDP Growth?

How do #GreenhouseGas #Emissions respond 2 ∆s in #RGDP? #IMF Working Paper 1856 looks @ #TopTwenty emitting countries, separates #Trend & #Cyclical components w a #HodrickPrescottFilter; finds *on average*, GHG emissions go up by 0.4X ∆RGDP (i.e. #TrendElasticity = 0.4) pic.twitter.com/YpeM0rUx5N

— Satyen Baindur (@Satyen_Baindur) March 15, 2018

Among #AEs in #Top20, avg #TrendElasticity =0; & 4 some AEs, GHGs *decrease* as RGDP↑ eg #UK #DE, esp recent years. In USA post-2005, GHGs _decrease_ w RGDP, #China GHGs ↑ slower than RGDP (though faster in post-2000 period), #India GHGs grow ~ as its RGDP via @LounganiPrakash

— Satyen Baindur (@Satyen_Baindur) March 15, 2018

Just to clarify - the #GHG/#RGDP #TrendElasticity for #China is < 1 both pre- and post-2000, but just a bit higher post-2000 (the dashed GHG curve bends toward the #RGDP line at year ~2000 in the picture above...)

— Satyen Baindur (@Satyen_Baindur) March 15, 2018

How do Demographics affect the Macroeconomy and Economic Growth?

.@IMF_India #Demography & #Macroeconomics: e.g.#DemographicDividend Early (#India) & Post (#China). How demography affects projected growth rates, how critical immigration is 4 Oz, SG & HK; how 2014-16 #China #RealInterestRate #Rstar is lower than in 2000-07. via @MacroPru pic.twitter.com/4SJwtJIA2U

— Satyen Baindur (@Satyen_Baindur) February 21, 2018

pic.twitter.com/b8nobwuFa9

— Satyen Baindur (@Satyen_Baindur) February 21, 2018

https://t.co/NhDcjyJICl

— Satyen Baindur (@Satyen_Baindur) February 21, 2018

IMF 2015 Mundell-Fleming Lecture: Benjamin S. Bernanke

04 January 2016 Update: The International Monetary Fund (IMF) has now posted the paper on which Ben Bernanke based his lecture: Federal Reserve Policy in an International Context. Thanks to David Wessel of the Brookings Institution for the update.

ICYMI: Paper underlying Ben Bernanke's Mundell Fleming lecture is posted https://t.co/RuyAX1Kbve

— David Wessel (@davidmwessel) January 4, 2016