Assumptions and Conventions

Preface

Joint Foreword to World Economic Outlook and Global Financial Stability Report

Executive Summary

Chapter 1. Global Prospects and Policies

Recovery Is Stronger than Expected, but Speed Varies

Financial Conditions Are Easing, but Not for All Sectors

Capital Is Again Flowing to Emerging Economies

Policy Support Has Been Essential in Fostering Recovery

Multispeed Recovery to Continue during 2010–11

Infl ation Pressures Are Generally Subdued but Diverge

Important Risks Remain amid Sharply Diminished Room for Policy Maneuvers

Policies Need to Sustain and Strengthen Recovery

Global Demand Rebalancing: e Role of Credibility and Policy Coordination

Appendix 1.1. Commodity Market Developments and Prospects

References

Chapter 2. Country and Regional Perspectives

A Stimulus-Driven U.S. Recovery Is under Way

Asia Is Staging a Vigorous and Balanced Recovery

Europe Is Facing an Uneven Recovery and Complex Policy Challenges

The CIS Economies Are Recovering at a Moderate Pace

Latin America and the Caribbean Are Recovering at a Robust Pace

The Middle East and North Africa Region Is Recovering at a Good Pace

Africa Is Coming through the Crisis Well

Chapter 3. Unemployment Dynamics during Recessions and Recoveries: Okun’s Law and Beyond

Broad Labor Market Dynamics during the Great Recession

Using Okun’s Law as a Framework

Step 1: Okun’s Law across Countries and over Time

Step 2: Analyzing Unemployment Rate “Forecast Errors”

The Key Issues: Drivers of Great Recession Dynamics and Recovery Prospects

Conclusions and Implications for the Recovery

Appendix 3.1. Data Sources and Construction

Appendix 3.2. Methodological Details

Appendix 3.3. Analysis on Dynamic Betas Derived from the Employment Version of Okun’s Law

Appendix 3.4. Regression Results Using Employment Forecast Errors and a Static Okun’s Law Specification

Appendix 3.5. Vector Autoregression Forecasting Methodology

References

Chapter 4. Getting the Balance Right: Transitioning out of Sustained Current Account Surpluses

Surplus Reversals: Definition and Anatomy

Are Policy-Driven Surplus Reversals Detrimental to Growth?

Surplus Reversals: Case Studies

Lessons for Economies Considering a Transition out of External Surpluses

Appendix 4.1. Sample for Analysis and Data Sources

Appendix 4.2. Scoring Method Used to Group Economies

References