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Balanced growth models are commonly used in macroeconomics because they are consistent with the well-known Kaldor facts regarding economic growth. These models, however, are inconsistent with one of the most striking regularities of the growth process—the massive reallocation of labor from agriculture into manufacturing and services. This paper presents a simple model consistent with both the Kaldor facts and the dynamics of sectoral labor reallocation. The model shows that balanced growth can be consistent with structural change.

Banks and Banking --- Macroeconomics --- Agribusiness --- Industries: Manufacturing --- Environment and Growth --- Interest Rates: Determination, Term Structure, and Effects --- Labor Economics: General --- Agriculture: General --- Industry Studies: Manufacturing: General --- Economic growth --- Finance --- Labour --- income economics --- Agricultural economics --- Manufacturing industries --- Sustainable growth --- Real interest rates --- Labor --- Agricultural sector --- Manufacturing --- Financial services --- Economic sectors --- Economic development --- Interest rates --- Labor economics --- Agricultural industries --- United States --- Income economics

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Natural disasters and climate change are interrelated macro-critical issues affecting all Pacific small states to varying degrees. In addition to their devastating human costs, these events damage growth prospects and worsen countries’ fiscal positions. This is the first cross-country IMF study assessing the impact of natural disasters on growth in the Pacific islands as a group. A panel VAR analysis suggests that, for damage and losses equivalent to 1 percent of GDP, growth drops by 0.7 percentage point in the year of the disaster. We also find that, during 1980-2014, trend growth was 0.7 percentage point lower than it would have been without natural disasters. The paper also discusses a multi-pillar framework to enhance resilience to natural disasters at the national, regional, and multilateral levels and the importance of enhancing countries’ risk-management capacities. It highlights how this approach can provide a more strategic and less ad hoc framework for strengthening both ex ante and ex post resilience and what role the IMF can play.

Climatic changes. --- Disaster insurance. --- Disaster relief. --- Macroeconomic. --- Exports and Imports --- Macroeconomics --- Environmental Economics --- Natural Disasters --- Climate --- Natural Disasters and Their Management --- Global Warming --- Environment and Growth --- International Monetary Arrangements and Institutions --- Fiscal Policy --- Foreign Aid --- Natural disasters --- Climate change --- International economics --- Fiscal stance --- Disaster aid --- Environment --- Fiscal policy --- Foreign aid --- Climatic changes --- International relief --- Vanuatu

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Weather-related natural disasters and climate change pose interrelated macro-fiscal challenges. Using panel-VARX studies for a sample of 19 countries in Developing Asia during 1970 to 2015, this paper contributes new empirical evidence on the dynamic adjustment path of growth and key fiscal variables after severe weather-related disasters. It does not only show that output loss can be permanent, but even twice as large for cases of severe casualties or material damages than people affected. Meanwhile, key fiscal aggregates remain surprisingly stable. Event and case studies suggest that this can reflect both a deliberate policy choice or binding constraints. The latter can make governments respond through mitigating fiscal policy efforts such as ad hoc fiscal rebalancing and reprioritization. The findings help better customize disaster preparedness and mitigation efforts to countries’ risk exposure along a particular loss dimension.

Macroeconomics --- Public Finance --- Natural Disasters --- Climate --- Natural Disasters and Their Management --- Global Warming --- Fiscal Policy --- Macroeconomic Analyses of Economic Development --- Environment and Growth --- Taxation, Subsidies, and Revenue: General --- Debt --- Debt Management --- Sovereign Debt --- Public finance & taxation --- Natural disasters --- Fiscal policy --- Revenue administration --- Public debt --- Fiscal stance --- Environment --- Revenue --- Debts, Public --- Myanmar

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Climate change is among humanity’s greatest challenges, and the Middle East and Central Asia region is on the frontlines of its human, economic, and physical ramifications. Much of the region is located in already difficult climate zones, where global warming exacerbates desertification, water stress, and rising sea levels. This trend entails fundamental economic disruptions, endangers food security, and undermines public health, with ripple effects on poverty and inequality, displacement, and conflict. Considering the risks posed by climate change, the central message of this departmental paper is that adapting to climate change by boosting resilience to climate stresses and disasters is a critical priority for the region’s economies.

Climatic changes --- Environmental economics. --- Economic aspects. --- Climate change --- Climate finance --- Climate --- Environment and Growth --- Environment --- Environmental Conservation and Protection --- Environmental Economics --- Environmental economics --- Environmental Economics: General --- Environmental Economics: Government Policy --- Environmental management --- Environmental policy & protocols --- Environmental Policy --- Environmental policy --- Environmental protection --- Global Warming --- Natural Disasters and Their Management --- Natural Disasters --- Natural disasters

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We question the conventional view that it is optimal for government to maintain a stable level of spending out of oil wealth. We compare this conventional policy recommendation with one where government spends all of its oil revenues upfront, at the same rate as oil is extracted. Using a neoclassical growth model with positive external effects of public spending on consumption and productivity, we find that, if the economy is growing along the steady-state balanced path, the conventional view is validated. However, if the economy starts with a lower capital stock, the welfare ranking across two policies can be reversed.

Fiscal policy --- Public investments --- Government investments --- Investments, Public --- Expenditures, Public --- Investments --- Capital budget --- Economic development projects --- Investment of public funds --- Finance --- Macroeconomics --- Public Finance --- National Government Expenditures and Related Policies: General --- Macroeconomics: Consumption --- Saving --- Wealth --- Environment and Growth --- Fiscal Policy --- National Government Expenditures and Related Policies: Infrastructures --- Other Public Investment and Capital Stock --- Public finance & taxation --- Economic growth --- Expenditure --- Consumption --- Sustainable growth --- Public investment spending --- National accounts --- Private consumption --- Economics --- Economic development --- Mexico