{
  "title": "Global Growth: Too Slow for Too Long",
  "publication": "IMF Blog, April 12, 2016",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2016/04/12/global-growth-too-slow-for-too-long",
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  "summary": "Global growth \"continues, but at an increasingly disappointing pace\" and \"has been too slow for too long.\"",
  "sections": [
    {
      "heading": "Overview and headline findings",
      "content": "- Global growth \"continues, but at an increasingly disappointing pace\" and \"has been too slow for too long.\"\n- The new World Economic Outlook anticipates growth to accelerate slightly from 3.1 to 3.2 percent in the current year, followed by 3.5 percent growth in 2017.\n- Forecasts have been progressively downgraded over time, reflecting a broad-based slowdown across countries and continuing trends highlighted in earlier World Economic Outlook editions.\n- Considerable diversity in performance remains within country groups."
    },
    {
      "heading": "Main risks and channels of downside",
      "content": "- Financial turbulence:\n  - Since last summer, two distinct rounds of global financial turbulence occurred, featuring abrupt sell-offs of risky assets, heightened risk aversion, spikes in emerging-market sovereign spreads, and sharp falls in prices of oil and other commodities.\n  - Markets largely recovered both times, but investor reactions may have exceeded what fundamentals warranted.\n  - These financial swings overlie a steady trend of global financial tightening, including increasing net capital outflows from emerging markets.\n  - More strains could begin to appear if conditions worsen.\n- Geopolitical, humanitarian, and political risks:\n  - Continuing violent instability in countries such as Syria is cratering their economies and driving millions of refugees to surrounding countries and Europe, creating a humanitarian disaster.\n  - These pressures challenge the European Union’s capacity to preserve open internal borders and have coincided with increased incidence of terrorism and a rising tide of inward-looking nationalism.\n  - There is a real possibility that the United Kingdom exits the European Union, damaging a wide range of trade and investment relationships.\n  - A backlash against cross-border economic integration in advanced countries, including the United States, threatens to halt or reverse postwar trends toward more open trade.\n  - Several large emerging market economies face deep contractions from internal political strife or geopolitical pressures, and a number of low-income and emerging market countries suffer El Niño-related drought or flooding.\n- Macroeconomic implications:\n  - A weaker growth baseline raises the chance that realized risks pull the world economy below \"stalling speed,\" risking a low-growth, deflationary equilibrium characterized by some economists as secular stagnation.\n  - Lack of wage growth and greater inequality have increased perceptions that growth has disproportionately benefited mobile elites and owners of capital, reinforcing inward-looking and nationalistic policies.\n  - Lower growth reduces the \"room for error\" for policymakers."
    },
    {
      "heading": "Policy framework: three-pronged approach",
      "content": "- Central recommendation:\n  - Adopt a three-pronged policy approach based on monetary, fiscal, and structural policies to both strengthen the baseline and prepare contingency plans for downside scenarios.\n- Monetary policy:\n  - Continue monetary accommodation where deflationary pressures and negative output gaps remain.\n  - Monetary policy needs support from fiscal and structural policies to be effective.\n- Fiscal policy:\n  - Infrastructure investment is attractive in a number of countries given currently low real borrowing rates.\n  - Fiscal support of research and development could yield notably rich payoffs.\n  - Balanced budget tax reforms can move fiscal policy toward more growth-friendly directions while supporting aggregate demand, labor force participation, and social cohesion.\n- Structural policies:\n  - A range of well-sequenced structural reforms can boost potential output, especially if accompanied by complementary fiscal support.\n  - Pro-competitive product market reforms can be expansionary in the near term, as seen in Canada, the Netherlands, Spain two decades ago, and Italy in the 2000s.\n  - Further financial sector strengthening (as detailed in the Global Financial Stability Report) is essential to create a context in which monetary, fiscal, and structural policies can be more effective."
    },
    {
      "heading": "Contingency planning and international cooperation",
      "content": "- Policymakers should identify mutually reinforcing fiscal and structural policy packages to deploy collectively if downside risks materialize.\n- Continue international cooperation to improve the functioning of the international monetary system and the stability of international finance to enhance global economic resilience.\n- The outlook's downside possibilities call for an immediate, proactive response: \"there is no longer much room for error.\" Joint recognition of shared risks and coordinated preparation can bolster confidence, support growth, and guard against a derailed recovery.\n\nGlobal Growth: Too Slow for Too Long — Maurice Obstfeld, April 12, 2016.\n\n---\n\n Content in this bundle\n\n- 全球经济：在太长时间里增长太慢; iMFdirect博客; 2016年4月12日\n  - 全球经济：在太长时间里增长太慢; iMFdirect博客; 2016年4月12日 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 全球经济：在太长时间里增长太慢; iMFdirect博客; 2016年4月12日 (PDF){rel=\"external\" type=\"application/pdf\"}\n- 世界経済の成長:余りにも長期にわたる余りにも 緩慢な成長 : モーリス・オブストフェルド; iMFdirect ブログ2016年4月12日掲載\n  - 世界経済の成長:余りにも長期にわたる余りにも 緩慢な成長 : モーリス・オブストフェルド; iMFdirect ブログ2016年4月12日掲載 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 世界経済の成長:余りにも長期にわたる余りにも 緩慢な成長 : モーリス・オブストフェルド; iMFdirect ブログ2016年4月12日掲載 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Слишком долгий период слишком медленного роста мировой экономики\n  - Слишком долгий период слишком медленного роста мировой экономики (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Слишком долгий период слишком медленного роста мировой экономики (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- عربي\n- World Economic Outlook\n- Global Financial Stability Report\n- World Economic Outlook\n- story\n- interview\n\nSource: https://www.imf.org/en/blogs/articles/2016/04/12/global-growth-too-slow-for-too-long"
    }
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    "Authors: Maurice Obstfeld",
    "Published: April 12, 2016",
    "Global growth \"continues, but at an increasingly disappointing pace\" and \"has been too slow for too long.\"",
    "The new World Economic Outlook anticipates growth to accelerate slightly from 3.1 to 3.2 percent in the current year, followed by 3.5 percent growth in 2017.",
    "Forecasts have been progressively downgraded over time, reflecting a broad-based slowdown across countries and continuing trends highlighted in earlier World Economic Outlook editions.",
    "Considerable diversity in performance remains within country groups.",
    "Financial turbulence:",
    "Geopolitical, humanitarian, and political risks:",
    "Macroeconomic implications:",
    "Central recommendation:",
    "Monetary policy:",
    "Fiscal policy:",
    "Structural policies:",
    "Policymakers should identify mutually reinforcing fiscal and structural policy packages to deploy collectively if downside risks materialize.",
    "Continue international cooperation to improve the functioning of the international monetary system and the stability of international finance to enhance global economic resilience.",
    "The outlook's downside possibilities call for an immediate, proactive response: \"there is no longer much room for error.\" Joint recognition of shared risks and coordinated preparation can bolster confidence, support growth, and guard against a derailed recovery.",
    "**全球经济：在太长时间里增长太慢; iMFdirect博客; 2016年4月12日**",
    "**世界経済の成長:余りにも長期にわたる余りにも 緩慢な成長 : モーリス・オブストフェルド; iMFdirect ブログ2016年4月12日掲載**",
    "**Слишком долгий период слишком медленного роста мировой экономики**",
    "[عربي](http://blog-montada.imf.org/?p=4175)",
    "[World Economic Outlook](http://www.imf.org/external/pubs/ft/weo/2016/01/index.htm)",
    "[Global Financial Stability Report](http://www.imf.org/external/pubs/ft/gfsr/2016/01/index.htm)",
    "[World Economic Outlook](http://www.imf.org/external/pubs/ft/survey/so/2016/RES040616A.htm)",
    "[story](http://www.imf.org/external/pubs/ft/survey/so/2016/NEW041216A.htm)",
    "[interview](http://www.imf.org/external/mmedia/view.aspx?vid=4841191545001)"
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