Growth at Risk: Concept and Application in IMF Country Surveillance

By Ananthakrishnan Prasad, Selim A Elekdag, Phakawa Jeasakul, Romain Lafarguette, Adrian Alter, Alan Xiaochen Feng, Changchun Wang

February 21, 2019

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Ananthakrishnan Prasad, Selim A Elekdag, Phakawa Jeasakul, Romain Lafarguette, Adrian Alter, Alan Xiaochen Feng, and Changchun Wang. Growth at Risk: Concept and Application in IMF Country Surveillance, (USA: International Monetary Fund, 2019) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

The growth-at-risk (GaR) framework links current macrofinancial conditions to the distribution of future growth. Its main strength is its ability to assess the entire distribution of future GDP growth (in contrast to point forecasts), quantify macrofinancial risks in terms of growth, and monitor the evolution of risks to economic activity over time. By using GaR analysis, policymakers can quantify the likelihood of risk scenarios, which would serve as a basis for preemptive action. This paper offers practical guidance on how to conduct GaR analysis and draws lessons from country case studies. It also discusses an Excel-based GaR tool developed to support the IMF’s bilateral surveillance efforts.

Subject: Asset prices, Credit aggregates, Financial sector policy and analysis, Financial statements, Growth-at-risk assessment, Housing prices, Money, Prices, Public financial management (PFM)

Keywords: Accommodative financial conditions, Asset price, Asset prices, Credit aggregates, Financial conditions partition, Financial statements, GaR analysis, GaR approach, GaR concept, GaR framework, GaR tool, GDP growth, Global, Growth distribution, Growth-at-risk assessment, House price growth, Housing prices, Price of risk, Scenario analysis, Term premium, WP

Publication Details

Pages:

39
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2019/036
Stock No:

WPIEA2019036
ISBN:

9781484397015
ISSN:

1018-5941

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