World Economic Outlook

World Economic Outlook

Recessions and Recoveries

April 2002

The World Economic Outlook presents the IMF staff’s analysis and projections of economic developments at the global level, in major country groups (classified by region, stage of development, etc.), and in many individual countries. It focuses on major economic policy issues as well as on the analysis of economic developments and prospects. It is usually prepared twice a year, as documentation for meetings of the International Monetary and Financial Committee, and forms the main instrument of the IMF’s global surveillance activities.

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Contents
232k pdf file	Assumptions and Conventions
	Preface
	Foreword
Chapter I.   516k pdf file	Economic Prospects and Policy Issues
	North America: A Strengthening Recovery
	Japan: Significant Challenges Remain
	How Will the Recovery in Europe Compare with That in the United States?
	Latin America: Resisting Spillovers from the Crisis in Argentina
	The Asia-Pacific Region: Turning the Corner
	European Union Candidates: Resisting the Global Downturn
	Commonwealth of Independent States (CIS): Continued Resilience
	Africa: Solid Growth Despite a Weak External Environment
	Middle East: Oil Price Volatility and Regional Security
	Appendix 1.1. Commodity Markets
	Appendix 1.2. Weakness in Japan, Global Imbalances, and the Outlook
	References
	Boxes
	1.1	Was It a Global Recession?
	1.2	On the Accuracy of Forecasts of Recovery
	1.3	The Introduction of Euro Notes and Coins
	1.4	China's Medium-Term Fiscal Challenges
	1.5	Rebuilding Afghanistan
	1.6	Russia's Rebound
	Tables
	1.1	Overview of the World Economic Outlook Projections
	1.2	Advanced Economies: Real GDP, Consumer Prices, and Unemployment
	1.3	Selected Economies: Current Account Positions
	1.4	Major Advanced Economies: General Government Fiscal Balances and Debt
	1.5	Emerging Market Economies: Net Capital Flows
	1.6	Selected Western Hemisphere Countries: Real GDP, Consumer Prices, and Current Account Balance
	1.7	Selected Asian Countries: Real GDP, Consumer Prices, and Current Account Balance
	1.8	European Union Candidates: Real GDP, Consumer Prices, and Current Account Balance
	1.9	Commonwealth of Independent States: Real GDP, Consumer Prices, and Current Account Balance
	1.10	Selected African Countries: Real GDP, Consumer Prices, and Current Account Balance
	1.11	Selected Middle Eastern Countries: Real GDP, Consumer Prices, and Current Account Balance
	1.12	Impact of a $5 a Barrel, Permanent Increase in Oil Prices After One Year
	1.13	Alternative Scenario: Japanese Weakness and Exchange Rate Adjustment
	Figures
	1.1	Global Indicators
	1.2	Emerging Signs of Recovery
	1.3	Financial Market Optimism
	1.4	Emerging Market Financing Conditions
	1.5	Global Recovery
	1.6	United States: Recessions and Recoveries8
	1.7	Japanese Policy Dilemmas
	1.8	European Slowdown
	1.9	Western Hemisphere: EMBI Plus Spreads and Exchange Rate
	1.10	Selected Latin American Countries: Export Shares, 2000
	1.11	Asia: Slowdown in Electronics Exports
	1.12	Growth and External Balances in Central and Eastern Europe
	1.13	Commonwealth of Independent States: Managing Oil Price Volatility
	1.14	Sub-Saharan Africa: Solid Growth in 2002 and 2003
	1.15	Middle East: Responding to Oil Price Volatility
	1.16	OPEC Target and Actual Production of Oil
	1.17	Share of World Oil Production of OPEC
	1.18	Movements in Nonfuel Commodity Prices and G-7 Real GDP
	1.19	Spot and Futures Commodity Prices
	1.20	Alternative Scenario
Chapter II.   305k pdf file	Three Essays on How Financial Markets Affect Real Activity
	Debt Crises: What's Different About Latin America?
	Is Wealth Increasingly Driving Consumption?
	Monetary Policy in a Low Inflation Era
	Appendix 2.1. A Stylized Model of Monetary Policy
	References
	Boxes
	2.1	How Important Is the Wealth Effect on Consumption?
	2.2	A Household Perspective on the Wealth Effect
	2.3	Can Inflation Be Too Low?
	Tables
	2.1	Export Performance in Latin America and Asia
	2.2	Volatility and Sovereign Debt Defaults and Reschedulings
	2.3	Sensitivity of Governments' Primary Deficits to the Business Cycle in Selected Emerging Markets
	2.4	General Government Interest Expenditure: Some International Comparisons
	2.5	General Government Debt: Percentage Share of External Debt
	2.6	Household Wealth and Indebtedness
	2.7	Equity and Housing Wealth Effects
	2.8	Estimated Impact of Change in Asset Value on Real Consumer Spending, 2000Q1–2001Q3
	2.9	Estimated Parameters of the Stylized Model for the U.S. Economy
	2.10	Estimated Parameters of the Stylized Model for Other Advanced Economies
	Figures
	2.1	Sovereign Defaults and Reschedulings
	2.2	External Debt
	2.3	Debt Service
	2.4	Foreign Exchange Restriction Index
	2.5	Total Public Debt
	2.6	Gross Private Saving
	2.7	Fiscal Balance and International Reserves in the Run-Up to Sovereign Debt Crises
	2.8	Ratio of Net Wealth to Disposable Income and Personal Saving Rate
	2.9	Ratio of Net Wealth to Disposable Income and Stock Price
	2.10	Selected Advanced Economies: Housing Prices and Market Capitalization
	2.11	Saving Rate Behavior in Response to Asset Price Changes
	2.12	Inflation in Selected Advanced Economies
	2.13	Inflation has Become Less Volatile and More Predictable
	2.14	Volatility in Output and Inflation
	2.15	Improving Monetary Policy Effectiveness
Chapter III.   238k pdf file	Recessions and Recoveries
	Were Business Cycles in the Late Nineteenth Century Different from Modern Cycles?
	Modern Business Cycles in Industrial Countries: A Tale of 93 Cycles
	The Current Cycle
	Appendix 3.1. Business Cycle Turning Points
	References
	Boxes
	3.1	Measuring Business Cycles
	3.2	The Great Depression
	3.3	Historical Evidence on Financial Crises
	3.4	Economic Fluctuations in Developing Countries
	3.5	Capital Account Crises in Emerging Market Countries
	Tables
	3.1	Recessions and Expansions: 1881–2000
	3.2	Relative Contributions to Recessions
	3.3	Relative Contributions to Recoveries
	3.4	Real Stock Price Contractions and Recoveries in Industrial Countries
	3.5	Changes in Short-Term Interest Rates
	Figures
	3.1	Real Output Growth
	3.2	Synchronization of Recessions, 1881–2000
	3.3	Recession Depth and Cyclical Path of Output
	3.4	Recession Depth and Duration
	3.5	Key Business Cycle Characteristics
	3.6	Synchronization of Recessions
	3.7	Cyclical Paths of Output and Investment
	3.8	Synchronization of Contractions in Output, Investment, and Consumption
	3.9	Contributions to Growth
	3.10	Synchronization of Contractions in Output and Stock Prices
Annex.   397k pdf file	Summing Up by the Acting Chair
	Statistical Appendix
	Assumptions
	Data and Conventions
	Classification of Countries
	General Features and Compositions of Groups in the World Economic Outlook Classification
	Countries in Transition
	List of Tables
	Output (Tables 1–7)
	Inflation (Tables 8–13)
	Financial Policies (Tables 14–21)
	Foreign Trade (Tables 22–26)
	Current Account Transactions (Tables 27–32)
	Balance of Payments and External Financing        (Tables 33–37)
	External Debt and Debt Service (Tables 38–43)
	Flow of Funds (Table 44)
	Medium-Term Baseline Scenario (Tables 45–46)
	Box
	A1	Economic Policy Assumptions Underlying the Projections for Selected Advanced Economies
119k pdf file	World Economic Outlook and Staff Studies for the World Economic Outlook, Selected Topics, 1992–2002