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How far to go – and to remain – in the direction of highly expansionary monetary policy hinges on the balance of marginal benefits and costs of additional monetary easing and its expected evolution over time. This paper sketches a framework for assessing this balance and applies it to four OECD economic areas: the euro area, Japan, the United Kingdom and the United States.
In the wake of the Great Recession, a massive monetary policy stimulus was provided in the main OECD
economies. It helped to stabilise financial markets and avoid deflation. Nonetheless, GDP growth has been sluggish and in some countries lower than expected given the measures taken, and estimated economic slack remains large.
Composite leading indicators (CLIs) continue to signal diverging growth patterns across major economies. The CLIs point to moderate improvements in growth in most major OECD countries but stabilising or slowing momentum in large emerging economies.
This paper analyses convergence in per capita gross regional product of Russia’s regions during the period 1995-2010, when regional data are available.
Important challenges for the future of Austrian well-being arise from demographic and environmental trends. The ageing of the population calls for a fair balance between life-time pension contributions and entitlements, drawing on the recent pension reform.
Austria enjoys strong material well-being and high quality of life. Steady convergence with top GDP
per capita levels translated into decisive improvements in household disposable incomes while significant redistribution has ensured low income inequality and poverty.
Mexico has achieved a high degree of decentralisation in public services, but the Mexican fiscal
federal system has important shortcomings. States and municipalities have become heavily dependent on
federal transfers to finance a growing share of public spending.
In the run-up to the financial crisis, indebtedness of households and non-financial businesses rose to historically high levels in many OECD countries; gross debt of financial companies rose dramatically relative to GDP. Much of the debt accumulation appears to have been based on excessive risk-taking and exceptional macro-economic conditions and therefore not sustainable.
Consumer prices in the OECD area rose by 1.8% in the year to June 2013 compared with 1.5% in the year to May 2013.
As its workforce ages and major economies shift towards producing higher value-added goods and services, New Zealand will face increasing challenges to remain globally competitive and maintain high living standards. Future growth will need to come increasingly from productivity gains, and resources will have to shift towards activities that rely more on skills, technology and intangible assets.