World economic outlook October 2014 : legacies, clouds, uncertainties.

Cover
Contents
Assumptions and Conventions
Further Information and Data xi
Preface
Foreword
Executive Summary
Chapter 1. Recent Developments, Prospects, and Policy Priorities
	Recent Developments and Prospects
	Risks
	Policies
	Special Feature: Commodity Market Developments and Forecasts, with a Focus on Natural Gas in the World Economy
	Box 1.SF.1. The Trade Implications of the U.S. Shale Gas Boom
	Box 1.1. Housing Markets across the Globe: An Update
	Box 1.2. The Origins of IMF Growth Forecast Revisions since 2011
	References
Chapter 2. Country and Regional Perspectives
	The United States and Canada: Recovery to Continue after Temporary Setback
	Europe
	Asia and Pacific: Steady Growth Ahead
	Latin America and the Caribbean: Still Losing Speed
	Commonwealth of Independent States: Coping with Geopolitical Uncertainties
	The Middle East, North Africa, Afghanistan, and Pakistan: Fragile Recovery
	Sub-Saharan Africa: Maintaining Speed
	Spillover Feature: Underlying Drivers of U.S. Yields Matter for Spillovers
	References
Chapter 3. Is It Time for an Infrastructure Push? The Macroeconomic Effects of Public Investment
	The Economics of Infrastructure: A Primer
	Public and Infrastructure Capital and Investment: Where Do We Stand?
	The Macroeconomic Effects of Public Investment
	Summary and Policy Implications
	Appendix 3.1. Data Sources and Country Groupings
	Appendix 3.2. The Macroeconomic Effects of Public Investment
	Box 3.1. Public Investment in Japan during the Lost Decade
	Box 3.2. Improving the Efficiency of Public Investment
	Box 3.3. Fiscal Balance Sheets: The Significance of Nonfinancial Assets and Their Measurement
	Box 3.4. The Macroeconomic Effects of Scaling Up Public Investment in Developing Economies
	Box 3.5. Fiscal Institutions, Rules, and Public Investment
	References
Chapter 4. Are Global Imbalances at a Turning Point?
	Introduction
	Narrowing the Bulge: The Evolution of Flow Imbalances
	The Mechanics of the Adjustment
	The Durability of the Adjustment
	The Stock Dimension of Imbalances
	Looking Ahead: How Will Global Imbalances Evolve?
	Conclusion
	Appendix 4.1. Data Definitions, Sources, and Descriptions
	Appendix 4.2. Panel Estimations
	Appendix 4.3. Distortions, Policies, and Imbalances
	Appendix 4.4. Counterfactual Output Gap Analysis
	Appendix 4.5. Vulnerability Thresholds
	Box 4.1. Switching Gears: The 1986 External Adjustment
	Box 4.2. A Tale of Two Adjustments: East Asia and the Euro Area
	References
Annex: IMF Executive Board Discussion of the Outlook, September 2014
Statistical Appendix
	Assumptions
	What’s New
	Data and Conventions
	Classification of Countries
	General Features and Composition of Groups in the World Economic Outlook Classification
	Table A. Classification by World Economic Outlook Groups and Their Shares in Aggregate GDP, Exports of Goods and Services, and Population, 2013
	Table B. Advanced Economies by Subgroup
	Table C. European Union
	Table D. Emerging Market and Developing Economies by Region and Main Source of Export Earnings
	Table E. Emerging Market and Developing Economies by Region, Net External Position, and Status as Heavily Indebted Poor Countries and Low-Income Developing Countries
	Table F. Economies with Exceptional Reporting Periods
	Table G. Key Data Documentation
	Box A1. Economic Policy Assumptions Underlying the Projections for Selected Economies
	List of Tables
		Output (Tables A1–A4)
		Inflation (Tables A5–A7)
		Financial Policies (Table A8)
		Foreign Trade (Table A9)
		Current Account Transactions (Tables A10–A12)
		Balance of Payments and External Financing (Table A13)
		Flow of Funds (Table A14)
		Medium-Term Baseline Scenario (Table A15)
World Economic Outlook, Selected Topics
Update: World Economic Outlook, January 2015 - Cross Currents
Tables
	Table 1.1. Overview of the World Economic Outlook Projections
	Table 1.SF.1. World Fossil Fuel Reserves, Production, and Consumption
	Table 1.SF.2. Natural Gas Reserves, Production, and Consumption, by Country
	Table 1.SF.1.1. Regression Results
	Table 1.1.1. IMF Assessments of Housing Market Developments in Rebound Economies
	Table 1.2.1. Contribution to Global Growth Forecast Error
	Table 2.1. Selected Advanced Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
	Table 2.2. Selected European Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
	Table 2.3. Selected Asian and Pacific Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
	Table 2.4. Selected Western Hemisphere Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
	Table 2.5. Commonwealth of Independent States: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
	Table 2.6. Selected Middle East and North African Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
	Table 2.7. Selected Sub-Saharan African Economies: Real GDP, Consumer Prices, Current Account Balance, and Unemployment
	Table 3.1. Elasticity of Output to Public Capital
	Table 3.2. Economy Group Composition
	Table 3.3. Data Sources
	Table 3.4. Effect of Public Investment on Output in Advanced Economies: Robustness Checks
	Table 3.5. Effect of Public Investment on Output in Emerging Market and Developing Economies: Public Investment Shocks Derived from a Fiscal Policy Rule
	Table 3.6. Effects of Public Investment on Output in Emerging Market and Developing Economies: Public Investment Instrumented by Predicted Official Loan Disbursement
	Table 3.3.1. Summary Classification of Nonfinancial Assets
	Table 4.1. Largest Deficit and Surplus Economies, 2006 and 2013
	Table 4.2. Largest Debtor and Creditor Economies (Net Foreign Assets and Liabilities), 2006 and 2013
	Table 4.3. Decomposition of Changes in Net Foreign Assets between 2006 and 2013
	Table 4.4. Data Sources
	Table 4.5. Sample Economies
	Table 4.6. Panel Regression Results, 1970–2013
	Table 4.7. Panel Regression Results, 2007–13
	Table 4.8. Estimated Threshold Values and Associated Classification Errors
	Table 4.1.1. Largest Deficit and Surplus Economies, 1986 and 1991
	Table 4.1.2. Panel Regression Results, Post–Plaza Accord versus Post–2006 Current Account Adjustments
	Table A1. Summary of World Output
	Table A2. Advanced Economies: Real GDP and Total Domestic Demand
	Table A3. Advanced Economies: Components of Real GDP
	Table A4. Emerging Market and Developing Economies: Real GDP
	Table A5. Summary of Inflation
	Table A6. Advanced Economies: Consumer Prices
	Table A7. Emerging Market and Developing Economies: Consumer Prices
	Table A8. Major Advanced Economies: General Government Fiscal Balances and Debt
	Table A9. Summary of World Trade Volumes and Prices
	Table A10. Summary of Current Account Balances
	Table A11. Advanced Economies: Balance on Current Account
	Table A12. Emerging Market and Developing Economies: Balance on Current Account
	Table A13. Summary of Financial Account Balances
	Table A14. Summary of Net Lending and Borrowing
	Table A15. Summary of World Medium-Term Baseline Scenario
Figures
	Figure 1.1. Global Activity Indicators
	Figure 1.2. Global Inflation
	Figure 1.3. Monetary Conditions in Advanced Economies
	Figure 1.4. Financial Market Conditions in Advanced Economies
	Figure 1.5. Financial Market Conditions and Capital Flows in Emerging Market Economies
	Figure 1.6. Fiscal Policies
	Figure 1.7. Monetary Policies and Credit in Emerging Market Economies
	Figure 1.8. GDP Growth Forecasts
	Figure 1.9. External Sector
	Figure 1.10. Exchange Rates and Reserves
	Figure 1.11. Risks to the Global Outlook
	Figure 1.12. Recession and Deflation Risks
	Figure 1.13. Iraq Oil Shock
	Figure 1.14. Secular Stagnation
	Figure 1.15. Capacity, Unemployment, and Output Trends
	Figure 1.SF.1. Commodity Market Developments
	Figure 1.SF.2. Balance of Risks
	Figure 1.SF.3. Natural Gas Prices
	Figure 1.SF.4. Liquefied Natural Gas Imports and Exports, 2013
	Figure 1.SF.5. United States: Liquefied Natural Gas Imports
	Figure 1.SF.6. Impulse Response of Relative Industrial Production to a Unit Relative Natural Gas Price Shock
	Figure 1.SF.7. Japan: Liquefied Natural Gas Imports
	Figure 1.SF.8. Japan: Liquefied Natural Gas Imports by Region
	Figure 1.SF.1.1. Manufacturing Sector Exports
	Figure 1.1.1. IMF Global House Price Index
	Figure 1.1.2. Two-Speed Recovery in Housing Markets
	Figure 1.1.3. Construction Gross Value Added and Residential Investment
	Figure 1.1.4. Use of Macroprudential Tools to Manage Housing Booms
	Figure 1.2.1. Growth Forecast Errors by Region, 2011–13
	Figure 1.2.2. Partner-Country versus Domestic Growth Forecast Error
	Figure 1.2.3. Growth Forecast Error versus Lagged Growth Forecast Error
	Figure 1.2.4. Growth and Forecast Revisions in Major Economies
	Figure 2.1. 2015 GDP Growth Forecasts and the Effects of a Plausible Downside Scenario
	Figure 2.2. The United States and Canada: Recovery to Continue after Temporary Setback
	Figure 2.3. Advanced Europe: At Different Stages of Recovery
	Figure 2.4. Emerging and Developing Europe: Domestic Demand Taking Hold
	Figure 2.5. Asia and Pacific: Steady Growth Ahead
	Figure 2.6. Latin America and the Caribbean: Still Losing Speed
	Figure 2.7. Commonwealth of Independent States: Coping with Geopolitical Uncertainties
	Figure 2.8. The Middle East, North Africa, Afghanistan, and Pakistan: Fragile Recovery
	Figure 2.9. Sub-Saharan Africa: Maintaining Speed
	Figure 2.SF.1. Implied Volatility
	Figure 2.SF.2. Drivers of U.S. Yields
	Figure 2.SF.3. Spillovers from U.S. Money and Real Shocks
	Figure 2.SF.4. United States: Average Response of Industrial Production after Varying Intervals
	Figure 2.SF.5. Spillovers from U.S. Money and Real Shocks by Country Group
	Figure 3.1. WEO Medium-Term Growth Projections
	Figure 3.2. Evolution of Public Capital Stock and Public Investment
	Figure 3.3. Physical Measures of Infrastructure
	Figure 3.4. Quality of Infrastructure in G7 Economies
	Figure 3.5. Effect of Public Investment in Advanced Economies
	Figure 3.6. Effect of Public Investment in Advanced Economies: Role of Economic Conditions, Efficiency, and Mode of Financing
	Figure 3.7. Output and Public Debt in the Aftermath of Public Investment Booms
	Figure 3.8. Effect of Public Investment on Output in Emerging Market and Developing Economies
	Figure 3.9. Model Simulations: Effect of Public Investment in Advanced Economies in the Current Scenario
	Figure 3.10. Model Simulations: Effect of Public Investment in Advanced Economies–– Role of Monetary Policy, Efficiency, and Return on Public Capital
	Figure 3.11. Model Simulations: Effect of Public Investment in Advanced Economies and Emerging Markets
	Figure 3.12. Evolution of Public Capital Stock and Public Investment
	Figure 3.13. Effect of Public Investment Shocks on Output, Recessions versus Expansions: Robustness Checks
	Figure 3.14. Effect of Public Investment Shocks on Output, High versus Low Efficiency: Robustness Checks
	Figure 3.15. Effect of Changes in Public Investment in Advanced Economies
	Figure 3.16. Distribution of Public Investment Booms over Time
	Figure 3.17. Output and Public Debt in the Aftermath of Public Investment Booms: Robustness Checks
	Figure 3.18. Output and Public Debt in the Aftermath of Public Investment Booms: Role of Natural Resources
	Figure 3.1.1. Japan: Public Investment and Growth
	Figure 3.1.2. Japan: Budget and Implementation of Public Investment
	Figure 3.2.1. Public Efficiency Measured by Efficiency Frontiers
	Figure 3.2.2. Public Investment Management Index Scores in Emerging Markets and Low-Income Countries
	Figure 3.3.1. General Government Assets and Liabilities, 2012
	Figure 3.4.1. Role of Type of Financing in Scaling Up Public Investment in Low-Income Countries
	Figure 3.4.2. Role of Improving Public Investment Efficiency in Low-Income Countries
	Figure 3.5.1. Fiscal Policies and Public Investment
	Figure 4.1. Global Current Account (“Flow”) Imbalances
	Figure 4.2. Largest Deficit Economies, 2006 and 2013
	Figure 4.3. Largest Surplus Economies, 2006 and 2013
	Figure 4.4. Key Indicators of External Adjustment, 2006 Episode
	Figure 4.5. Growth of Domestic Demand Relative to Trading Partners versus 2006 Current Account
	Figure 4.6. Change in Real Effective Exchange Rate (CPI Based) versus 2006 Current Account
	Figure 4.7. Changes in Domestic Demand and Current Account
	Figure 4.8. Changes in Real Effective Exchange Rate and Current Account
	Figure 4.9. Current Account Balances, Cyclically Adjusted and Unadjusted
	Figure 4.10. Largest Deficit and Surplus Economies: Current Account Gaps
	Figure 4.11. Understanding Changes in Distortions Using External Balance Assessment Regressions, 2006 versus 2013
	Figure 4.12. Global Net Foreign Assets (“Stock”) Imbalances
	Figure 4.13. Gross Foreign Assets and Liabilities
	Figure 4.14. Adjustment in Net Foreign Assets versus Current Account Balance
	Figure 4.15. Global Current Account Imbalances
	Figure 4.16. Global Net Foreign Asset Imbalances
	Figure 4.17. Determining Net Foreign Asset Sustainability
	Figure 4.18. Largest Deficit/Debtor Economies: Current Account versus Net Foreign Assets, 2006, 2013, and 2019
	Figure 4.1.1. Global Current Account Imbalances in Absolute Terms
	Figure 4.1.2. Historical Decomposition of Current Account Adjustment
	Figure 4.2.1. Current Account Balances
	Figure 4.2.2. Real GDP
	Figure 4.2.3. Real Domestic Demand Growth
	Figure 4.2.4. Real External Demand Growth
	Figure 4.2.5. Real Effective Exchange Rates (CPI Based)
	Figure 4.2.6. Exports and Imports as a Share of GDP
	Figure 4.2.7. Real Exports, Imports, and Foreign GDP