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Productivity growth in Italy has been persistently anemic and has lagged that of the euro area over the period 1999-2015, while the indebtedness of its corporate sector has increased. Using the ORBIS firm-level database, this paper studies the long-term impact of persistent corporate-debt accumulation on the productivity growth of Italian firms and investigates whether total factor productivity growth varies with the level of corporate indebtedness. We employ a novel estimation technique proposed by Chudik, Mohaddes, Pesaran, and Raissi (2017) to account for dynamics, bi-directional feedback effects, cross-firm heterogeneity, and cross-sectional dependence arising from unobserved common factors (for example, oil price shocks, labor and product market frictions, and stance of global financial cycle). Filtering out the effects of unobserved common factors and controlling for firmspecific characteristics, we find significant negative effects of persistent corporate debt build-up on total factor productivity growth, and weak evidence of a threshold level of corporate debt, beyond which productivity growth drops off significantly. Our results have strong policy implications, for example the design of the tax system should discourage persistent corporate debt accumulation, and effective and timely frameworks to reduce corporate debt overhangs are essential.

Exports and Imports --- Industries: Manufacturing --- Production and Operations Management --- Production --- Cost --- Capital and Total Factor Productivity --- Capacity --- Macroeconomics: Production --- International Lending and Debt Problems --- Industry Studies: Manufacturing: General --- Human Capital --- Skills --- Occupational Choice --- Labor Productivity --- 'Panel Data Models --- Spatio-temporal Models' --- Firm Behavior: Empirical Analysis --- Macroeconomics --- International economics --- Manufacturing industries --- Total factor productivity --- Productivity --- Debt burden --- Manufacturing --- Labor productivity --- External debt --- Economic sectors --- Industrial productivity --- Debts, External --- Italy --- Panel Data Models --- Spatio-temporal Models

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Credit spreads rise after a monetary policy tightening, yet spread reactions are heterogeneous across firms. Exploiting information from a panel of corporate bonds matched with balance sheet data for U.S. non-financial firms, we document that firms with high leverage experience a more pronounced increase in credit spreads than firms with low leverage. A large fraction of this increase is due to a component of credit spreads that is in excess of firms' expected default. Our results suggest that frictions in the financial intermediation sector play a crucial role in shaping the transmission mechanism of monetary policy.

Business and Economics --- Macroeconomics --- International Economics --- Financial Markets and the Macroeconomy --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Economic & financial crises & disasters --- Economics of specific sectors --- Financial crises --- Economic sectors --- Currency crises --- Informal sector --- Economics

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This paper assess how priorities of the IMF’s membership have evolved over the past two decades, by using text mining techniques on a unique dataset combining IMFC communiqués and constituency statements. Our results reveal significant variation in priorities across time and constituencies. Statements can be characterized by the weight which they place on three key priorities: (i) growth; (ii) debt and development; and (iii) crisis management and quota reform. Sentiment analysis techniques also show that addressing climate change is a topic which is viewed positively by an increasing number of constituencies.

Macroeconomics --- Economics: General --- International Economics --- Environmental Economics --- Natural Resource Extraction --- Financial Risk Management --- Foreign Exchange --- Informal Economy --- Underground Econom --- Climate --- Natural Disasters and Their Management --- Global Warming --- Industry Studies: Primary Products and Construction: General --- Financial Crises --- Crisis Management --- Economic & financial crises & disasters --- Economics of specific sectors --- Climate change --- Extractive industries --- Environment --- Mining sector --- Economic sectors --- Global financial crisis of 2008-2009 --- Financial crises --- Crisis management --- Currency crises --- Informal sector --- Economics --- Climatic changes --- Mineral industries --- Global Financial Crisis, 2008-2009 --- United States

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Nearly all countries in the Middle East and Central Asia have pledged to contain greenhouse gas emissions as part of the Paris Agreement. The purpose of this paper is to identify the menu of fiscal policy options which would allow the region to fulfil its emissions reduction commitment. Specifically, the paper examines and estimates the tradeoff between two broad categories of fiscal policies: public investments in renewable sources of energy and measures that raise the effective price of fossil fuels. Such a dichotomy captures the key medium-term macroeconomic and long-term intergenerational trade-offs that are arguably the most pertinent for the countries in the Middle East and Central Asia where governments are likely to play a leading role in the low-carbon transition. At one end of this tradeoff, a gradual removal of all fuel subsidies and, in addition, a phased introduction of a carbon tax of $8 per metric-ton of CO2-equivalent in the Middle East, North Africa, Afghanistan, and Pakistan (MENAP) and $4 in the Caucasus and Central Asia (CCA) over the next eight years could achieve the region’s 2030 emissions abatement goals without additional investments in renewables. T Alternatively, additional combined public investments of close to US$900 billion in renewable sources of energy between 2023 and 2030 would allow achieving the region’s emissions reduction targets with fuel subsidies reduced by two thirds and without any carbon tax. In practice, most countries are likely to choose a mix of these policies based on their individual circumstances. Importantly, the deployment of non-fiscal mitigation policies—such as tightening of environmental regulations, such as raising emissions standards, or incentivizing green private investments—could play an important role in reducing the required fiscal effort and improving the tradeoff described above. Global and regional initiatives to provide affordable financial support and technological assistance would be equally important in improving the region’s economic options. Regardless of the chosen strategy, delaying the rollout of mitigation policies would make achieving the emissions reduction targets more difficult and costly. Therefore, an early start will be essential to tread a smoother path toward a low-carbon future in the Middle East and Central Asia.

Fiscal policy. --- Environmental economics. --- Economics --- International agencies --- International Agreements and Observance --- International Economics --- International institutions --- International organization --- International Organizations --- Political Economy --- Political economy --- Public Policy

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Prior to the COVID-19 shock, the key challenge facing policymakers in the Middle East, North Africa, and Central Asia region was how to generate strong, sustainable, job-rich, inclusive growth. Post-COVID-19, this challenge has only grown given the additional reduction in fiscal space due to the crisis and the increased need to support the recovery. The sizable state-owned enterprise (SOE) footprint in the region, together with its cost to the government, call for revisiting the SOE sector to help open fiscal space and look for growth opportunities.

Corporate governance. --- Civil service & public sector --- Communicable diseases --- Comparative Studies of Countries --- Comparison of Public and Private Enterprises and Nonprofit Institutions --- Contracting Out --- Corporate Finance and Governance: Government Policy and Regulation --- Corporate Governance --- Corporate governance --- Corporations--Finance --- Covid-19 --- Debts, Public --- Diseases: Contagious --- Economic sectors --- Economywide Country Studies: Asia including Middle East --- Enterprise Policy --- Finance, Public --- Financial risk management --- Firm Performance: Size, Diversification, and Scope --- Fiscal policy --- Fiscal risks --- Government business enterprises --- Health Behavior --- Health --- Health: Other --- Industrial Policy --- Infectious & contagious diseases --- Institutions and Growth --- International Economics --- International institutions --- Macroeconomics --- National Budget, Deficit, and Debt: General --- Nationalization --- Nonprofit Organizations and Public Enterprise: General --- Political economy --- Privatization --- Public Administration --- Public Enterprises --- Public enterprises --- Public finance & taxation --- Public Finance --- Public financial management (PFM) --- Public ownership --- Public Policy --- Public Sector Accounting and Audits --- Public sector --- Public-Private Enterprises --- Role & responsibilities of boards & directors --- Wage Differentials --- Wage Level and Structure --- Egypt, Arab Republic of