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February 2014

Tracking the causes of Eurozone external imbalances: New evidence

Aristomene Varoudakis's picture

The Eurozone sovereign debt crisis, triggered by the 2008–09 global financial crisis, exposed macroeconomic imbalances in member countries that had accrued gradually following the advent of the euro in 1999. The growing current-account deficits in the Eurozone periphery and surpluses in the core were a main symptom of these imbalances (Figure 1).1 These patterns of intra-Eurozone current-account imbalances led to the accumulation of large external debts in the Eurozone periphery, matched by growing claims held by commercial banks in the core.

Of happy and sad faces: How poverty and changing gender norms impact Roma communities

Valerie Morrica's picture
When we carried out focus group discussions in four Roma communities in Bulgaria for our study on Gender Dimensions of Roma Inclusion, we asked Roma men and women to indicate their overall level of happiness on a scale from 1 to 10. A 10, represented by a smiley face, meant they were “very happy.” A 1 was depicted by a sad face and meant they were “very unhappy.”

What we found from this survey stunned us: most Roma women answered that they were “happy” or “very happy” and the majority of Roma men had circled the sad face. We did not expect this outcome. In fact, we had expected to find the exact opposite.

On the surface, our research confirmed several common perceptions – especially concerning gender norms.

So why, then, do Roma women seem to be much happier than Roma men?

Quote of the Week: Olav Thon

Sina Odugbemi's picture

 "You can’t feed a cat with cream and food in the kitchen and expect him to go catch mice."

 - Olav Thon, a Norwegian real estate developer and billionaire, who worked his way from being a poor farm boy to Norway’s wealthiest resident.  He is listed in the Forbes list of billionaires as the 198th richest person in the world and is nicknamed "the fox."

 

Equilibrium Credit: Providing Not Too Much, Not Too Little Credit to the Economy

Martin Melecky's picture

Credit is actively used by only about 8 percent of people in developing countries and about 14 percent in developed countries (World Bank Findex). The observed gaps in financial inclusion thus suggest that greater access to credit is warranted.

However, finance can be a double-edged sword. Rapid financial development and deepening can cause accumulation of systemic risk and lead to costly financial crises (Reinhart and Rogoff 2009). Banking crises in Thailand (1997), Colombia (1982), and Ukraine (2008), for example, were preceded by excessive credit growth of 25 percent, 40 percent, and 70 percent per year, respectively. Providing the right amount of credit—not too much and not too little—is thus a major concern for countries and their policy makers.

When credit provision becomes excessive or insufficient is judged against an unobserved benchmark known as equilibrium credit. Estimating equilibrium credit is one of the most challenging tasks of determining excessive or insufficient credit provision.

The quality of education in MENA: Some good news

Farrukh Iqbal's picture
 Some good news

In some respects, the Middle East and North Africa region has a very strong record in the area of education.  For example, if we rank countries by increases in the average number of years of schooling between 1980 and 2010, nine of the top twenty are from the MENA region. This good performance in the quantity of education stands in sharp contrast to the comparatively weak performance of the region in sustaining high economic growth over the last three decades.

The Hawthorne Effect: What Do We Really Learn from Watching Teachers (and Others)?

David Evans's picture
We are delighted that Dave Evans has agreed to be a semi-regular contributor to this blog, agreeing to post about once a month. David is a Senior Economist in the Chief Economist's Office for the Africa region of the World Bank, and coordinates impact evaluation work across sectors in the Africa region.

Is Economic Growth Good for the Bottom 40 Percent?

Mamta Murthi's picture

Lessons from the recent history of Central Europe and the Baltics


Economic growth has returned to Central Europe and the Baltics. With the exception of Slovenia, all countries are expected to see positive growth in 2014 - ranging from a tepid 0.8% in Croatia, to more respectable growth rates of 2.2% in Romania and 2.8% in Poland, to highs of 3-4.5% percent in the Baltic Republics. Europe, more broadly, is also turning the corner and is expected to grow at around 1.5%.

Amidst this much welcome growth, however, one question remains: will economic growth be good for the bottom 40 percent and can they expect to see their incomes grow?

Jobs, technology, and disruptive change

Siddhartha Raja's picture
Not being skilled for work in 2030 will have serious implications

The children entering school in 2014 will start working in about 2030. One can safely assume that the world then will rely even more on information and communications technologies. After all, technology is already transforming agriculture, manufacturing, healthcare, financial services, and more.

Can International Remittances Be Unproductive in Recipient Countries? Not Really!

Zahid Hussain's picture
A recent Bangladesh Bank study reports that remittance sent by expatriates is mostly used for consumption and in the “non-productive” sectors in the country. The survey conducted in 2011 found 90% of remittances were used for meeting basic needs. Seventy-five percent of households receiving remittance spent those on food, 42% on loan repayment, 65% on education, 57% on treatment, 49% on marriage and 4% on running legal battles (multiple responses allowed).

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