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As time elapses since the 2008 global financial crisis, concerns are growing about the weakness of the global recovery, and about the possible long term consequences of the crisis. In recent research, feeding inter alia the latest World Economic Outlook, the IMF staff analyses these issues, with special focus on potential output and investment. This work suggests that potential output growth in advanced economies is likely to increase slightly from current rates as some crisis-related effects wear off, but to remain below precrisis rates in the medium term. In contrast, in emerging market economies, potential output growth is expected to decline further. As to private fixed investment, it contracted sharply in advanced economies during the global financial crisis, and there has been little recovery since. Investment has generally slowed more gradually in the rest of the world. Although housing investment fell especially sharply during the crisis, business investment accounts for the bulk of the slump, and the overriding factor holding it back has been the overall weakness of economic activity. |
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Daniel Leigh is Deputy Division Chief at the Research Department of the International Monetary Fund, where he leads teams that produce the World Economic Outlook. Past IMF positions include work on Colombia, Gabon, Haiti, Hungary, Lithuania, and Peru. His research interests are in international macroeconomics, with a focus on fiscal and monetary policy, and he has published in numerous academic journals. He holds a Ph.D. in Economics from Johns Hopkins University, and a M.Sc. in Economics from the London School of Economics. |
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Roberto Garcia-Saltos, an Ecuadorian citizen, is Deputy Division Chief in the Economic Modeling Division of the Research Department. Currently he is in charge of developing a framework to assess potential output across the largest countries in the world. Previously, he was managing the Global Projection Model, and has held positions in various departments at the Fund, including in Research, Western Hemisphere and the IMF Institute. Before joining the IMF, he headed the research department at the Central Bank of Ecuador. His research interests include: international macroeconomics, structural macro-modeling, linkages between financial and real sector issues, and developing forecasting and monetary policy systems. He has published in referred journals and in the IMF working papers series. Mr. Garcia-Saltos holds a Ph.D. from Texas A&M University and MA from ITAM (Mexico). |
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Discussant : Urszula Szczerbowicz |
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