world real gdp growth in 2010 - milken institute · in five years as of q1 2011 rank country...
TRANSCRIPT
![Page 1: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/1.jpg)
World real GDP growth in 2010Annual percent change
Source: International Monetary Fund.
10% or more
6-10%
3-6%
0-3%Less than 0%No data
![Page 2: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/2.jpg)
World real GDP growth in 2011Annual percent change
Source: International Monetary Fund.
10% or more
6-10%
3-6%
0-3%Less than 0%No data
![Page 3: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/3.jpg)
Solid recovery
World real GDP grew by 5 percent in 2010
-6
-4
-2
0
2
4
6
8
10
1980 1985 1990 1995 2000 2005 2010 2015
Emerging and developing economies
Advanced economies
World
Real GDP growth, percent
Source: World Economic Outlook, International Monetary Fund, April 2011 update.
![Page 4: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/4.jpg)
World output forecasts Percent change from previous year
2010 2011F 2012F
World 5.0 4.4 4.5
Advanced economies 3.0 2.4 2.6
United States 2.8 2.8 2.9
Japan 3.9 1.4 2.1
United Kingdom 1.3 1.7 2.3
Euro area 1.7 1.6 1.8
Emerging and developing economies 7.3 6.5 6.5
Brazil 7.5 4.5 4.1
China 10.3 9.6 9.5
India 10.4 8.2 7.8
Russia 4.0 4.8 4.5Source: World Economic Outlook, International Monetary Fund, April 2011.
![Page 5: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/5.jpg)
Inflation risk ahead?Percent change in consumer prices (year-to-year)
0
1
2
3
4
5
6
7
8
9
10
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Emerging and developing economies
Advanced economies
World
Percent
Source: World Economic Outlook, International Monetary Fund, April 2010 update.
![Page 6: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/6.jpg)
Inflation pressure rising in emerging countries
-2
0
2
4
6
8
10
12
14
16
18
2007 2008 2009 2010 2011
% change in consumer price index, 3-month rolling average
Brazil
China
IndiaRussia
Source: OECD, Milken Institute.
![Page 7: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/7.jpg)
Inflation pressure rising in emerging countries
-2
0
2
4
6
8
10
12
14
16
18
2007 2008 2009 2010 2011
% change in consumer price index, 3-month rolling average
Brazil
China
IndiaRussia
Source: OECD, Milken Institute.
![Page 8: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/8.jpg)
Emerging countries have tightened monetary policy
in fear of inflation
Target interest rates of central banks
0
2
4
6
8
10
12
14
16
2008 2009 2010 2011
Policy interest rates, percent
China
Brazil
India
India
Source: Bloomberg.
![Page 9: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/9.jpg)
Implied volatility: U.S. vs. emerging markets
0
10
20
30
40
50
60
70
80
90
2004 2005 2006 2007 2008 2009 2010 2011
Chicago Board OptionsExchange Volatility
Index (VIX)
Implied volatility, percent
JPMorganEmerging MarketVolatility
Index (VXY)
Source: Bloomberg.
![Page 10: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/10.jpg)
End of the era of cheap capital?Consensus forecasts: Central bank rates will increase in the next 12 months
0.0
0.5
1.0
1.5
2.0
2.5
Q1 10
Q2 10
Q3 10
Q4 10
Q1 11
Q2 11
Q3 11
Q4 11
Q1 12
Q2 12
Percent
U.K.
U.S.
Eurozone
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Q1 10
Q2 10
Q3 10
Q4 10
Q1 11
Q2 11
Q3 11
Q4 11
Q1 12
Q2 12
Percent
Russia
China
Brazil
India
Source: Bloomberg.
![Page 11: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/11.jpg)
Global imbalances on the rise againProjections after 2010
Sources: International Monetary Fund, Milken Institute.
Note: Discrepancies are not plotted.
-4
-3
-2
-1
0
1
2
3
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
U.S.
China
Emerging Asia
Oil exporting countries
Rest of world
Percent of world GDP
![Page 12: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/12.jpg)
Performance of emerging bond marketsTotal return of JPMorgan EMBI Global indexes
Sources: DataStream, Milken Institute.
-1.7
22.4
-14.2
20.9
-6.7
17.3
-10.2
17.2
-11.1
16.7
-20
-15
-10
-5
0
5
10
15
20
25
2008 2009 to Q1 2011
Middle East Europe
Asia Africa
Latin America
Annualized total return, percent
![Page 13: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/13.jpg)
The persistence of sovereign defaults
Argentina Ecuador Paraguay Uruguay Venezuela
• 1830
• 1890
• 1915
• 1930s
• 1982
• 2001
• 1832
• 1868
• 1911
• 1914
• 1931
• 1982
• 1999
• 2008
• 1827
• 1874
• 1892
• 1920
• 1932
• 1986
• 2003
• 1876
• 1891
• 1915
• 1933
• 1983
• 2003
• 1832
• 1878
• 1892
• 1898
• 1932
• 1998
Sovereign defaults in selected countries, 1824 to 2008
Sources: Sturzenegger and Zettelmayer (2006), Moody‘s, Milken Institute.
![Page 14: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/14.jpg)
A map for world sovereign defaults
1932
1935
1932
1991
1991
19851983
2001
1812
18771892
19321981
1986
20041983
1983
1939
1972
2002
1932 2000
2008
19841982
2004
1984
2003
2003
‘87
1940
1932 1942
2002
1981
1982
1993
2000
![Page 15: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/15.jpg)
Sovereign debt most likely to default
in five years As of Q1 2011
Rank Country
Five-year cumulative
probability of default
(%) Rank Country
Five-year cumulative
probability of default
(%)
1 Greece 57.7 6 Ukraine 27.7
2 Venezuela 51.8 7 Dubai 24.7
3 Ireland 43.0 8 Lebanon 21.9
4 Portugal 40.1 9 Iraq 21.1
5 Argentina 34.7 10 Egypt 21.1Source: CMA Global Sovereign Credit Risk Report.
Note: Ranked by five-year cumulative probability of default.
![Page 16: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/16.jpg)
Capital raised: Developing Asia attracts
the most funding after the crisis
Europe31%
Developing Asia27%
Western Hemisphere
24%
Middle East and North
Africa14%
Sub-Saharan
Africa4%
2002-2006
Developing Asia45%
Western Hemisphere
23%
Europe19%
Middle East and North
Africa10%
Sub-Saharan
Africa3%
2010
Source: International Monetary Fund.
![Page 17: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/17.jpg)
Emerging markets: Equity markets have
returned to pre-crisis level
0
25
50
75
100
125
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
US$ index, 2007=100
Latin America
Eastern Europe
Emerging Asia
Source: Bloomberg.
![Page 18: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/18.jpg)
Emerging market bond yield spreadsAs of April 8, 2011
9.57
5.534.88 4.61 4.55 4.49 4.27 3.88 3.47 3.19
2.59
0.62 0.52 0.32 0.210
2
4
6
8
10
12
Percent
Sources: Bloomberg, Milken Institute.
![Page 19: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/19.jpg)
The education gap across regions
Source: Robert Barro and Jong-Wha Lee (2010).
9.2
61.2
88.1
77.1
45.9
67.1
76.1
16.1
2.3
17.424.5
32.6
7.7 7.9
33.2
1.30
10
20
30
40
50
60
70
80
90
100
Advanced
countries
Developing
countries
Middle East
and North
Africa
Sub-Saharan
Africa
Latin
America
East Asia
and the
Pacific
South Asia Europe and
Central Asia
1950
2010
Population with no schooling, percent of population age 15 and over
![Page 20: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/20.jpg)
Average years of schooling increased dramatically
for developing countries in the past 60 years
6.22
2.05
0.761.28
2.571.77
1.02
4.83
11.03
7.09 7.12
5.23
8.26 7.94
5.24
9.65
0
2
4
6
8
10
12
Advanced
countries
Developing
countries
Middle East
and North
Africa
Sub-Saharan
Africa
Latin
America
East Asia
and the
Pacific
South Asia Europe and
Central Asia
1950 2010Average years of schooling
Source: Robert Barro and Jong-Wha Lee (2010).
![Page 21: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/21.jpg)
Return on human capital
Source: Robert Barro and Jong-Wha Lee (2010).
12.1%13.3%
7.8%6.6% 6.5%
10.3%11.3%
8.5%
0%
2%
4%
6%
8%
10%
12%
14%
World Advanced countries
Middle East and North
Africa
Sub-Saharan Africa
Latin America
East Asia and the Pacific
South Asia Europe and Central Asia
Rate of return on an additional year of schooling, percent
![Page 22: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/22.jpg)
Investment rates have increased across
all emerging market regions since 2000
21.4
n.a.
20.318.5
28.8
14.6
n.a.
19.321.4
19.623.6
35.2
23.620.2
24.126.4
21.9
26.4
43.939.5
22.1
05
101520253035404550
Africa Eastern Europe
Latin America Emerging Asia
excluding China and
India
China India Other emerging countries
1970
2000
2008
Investment,percent of GDP
Source: McKinsey Global Institute.
![Page 23: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/23.jpg)
Emerging countries vs. developed countries
Investment in infrastructure as a share of GDP, nominal values
3.5
0.5
1.1
1.9
5.7
0.8
1.8
3.1
0 1 2 3 4 5 6
Total infrastructure
Telecom
Utilities
Transportation
% GDP Emerging economies
3.6
0.7
1.4
1.5
2.8
0.5
1
1.3
0 1 2 3 4
Total infrastructure
Telecom
Utilities
Transportation 2008
1980
Developed economies
Source: McKinsey Global Institute; McKinsey Global Economic Growth Database.
![Page 24: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/24.jpg)
Ruben Vardanian slides
![Page 25: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/25.jpg)
Population growth Percent
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2007 2008 2009 2010 2011E
India
Brazil
China
Russia
Source: CIA 2010 World Factbook.
![Page 26: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/26.jpg)
Birth and death ratesPro mille
0
5
10
15
20
25
Brazil India China Russia
Birth rate
Death rate
Source: CIA 2010 World Factbook.
![Page 27: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/27.jpg)
Life expectancyYears
66.29
62 64 66 68 70 72 74 76
Russia
India
Brazil
China
Source: CIA 2010 World Factbook。
![Page 28: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/28.jpg)
LiteracyPercent
99.40%
0% 20% 40% 60% 80% 100%
India
Brazil
China
Russia
Source: CIA 2010 World Factbook.
![Page 29: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/29.jpg)
Quality of management schools
Source: Global Competitiveness Report 2007-2011.
Benchmark 2010 QATAR
Ran
kin
g
0
20
40
60
80
100
2007 2008 2009 2010
India
China
Brazil
Russia
![Page 30: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/30.jpg)
Brain drain
30
40
50
60
70
80
90
2007 2008 2009 2010
India
China
Brazil
Russia
Source: Global Competitiveness Report 2007-2011.
Benchmark 2010 SWITZERLANDR
an
kin
g
![Page 31: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/31.jpg)
Corporate spending on R&D
20
25
30
35
40
45
50
55
2007 2008 2009 2010
China
Brazil
India
Russia
Source: Global Competitiveness Report 2007-2011.
Benchmark 2010 SWEDEN
Ran
kin
g
![Page 32: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/32.jpg)
Government spending on R&DPercent of GDP
1.1%
0%
1%
2%
3%
4%
Source: OECD, 2010.
![Page 33: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/33.jpg)
Peter Dattels slides
![Page 34: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/34.jpg)
less than 0
0 to 3
3 to 6
more than 6
no data
Average projected real GDP growth during 2011-2012(percent)
4.3
4.7
9.6
8.0
2.81.7
1.7
The two-speed global recovery posses challenges
Source: International Monetary Fund.
![Page 35: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/35.jpg)
Will capital flowing into EMs create imbalances?
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
1994 1996 1998 2000 2002 2004 2006 2008 2010
Z score
Capital flows
Real credit
Real equity prices
Asiancrisis
Russiacrisis
Start ofglobal
financialcrisis
Lehmancollapse
Source: International Monetary Fund.
![Page 36: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/36.jpg)
EM banks expand lending while corporates
releverageReal credit and GDP growth(2008-10, in percent)
0
4
8
12
16
20Real credit growth
Real GDP growth
BRIC Countries: Debt-to-Equity
Ratios of the Corporate Sector (2005 = 100, Russia on right scale)
50
100
150
200
250
300
50
75
100
125
150
175
200
2005 2006 2007 2008 2009 2010e
Brazil: a) 182, b) 60
India: a)106, b) 21
Russia: a) 54, b) 21
China: a)108, b) 24
a) D/E ratio 2010, in percent
b) D/E ratio 2010, percentage points above average
1994-2009
Source: International Monetary Fund.
![Page 37: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/37.jpg)
-5.0
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
South Africa
Russia Mexico Indonesia Chile India Brazil Malaysia China
2011 projected output gap
Emerging Economies
(percent of potential GDP)
Source: International Monetary Fund.
*Real policy rate is defined as current policy rate (Mar. 2011) minus 1-year ahead consensus inflation expectation normalized by its 5-year average (2005-10);
percentage points.
EM monetary policy: Falling behind the curve?
Country flags represent the real policy rate*
![Page 38: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/38.jpg)
Advanced Economies
More structural policies
needed -- > Cleaning
• Banks:
• Mainly in Europe
• Transparency, Capital, Restructuring/Resolution
• Sovereigns:
• Most AEs
• Fiscal consolidation
• Households:
• Mainly in U.S., some European
• Reducing debt burdens
Emerging Markets
More macroeconomic policies
needed -- > Leaning
• Limit overheating and buildup of
financial risks:
• Tighten macro policies
• Use macro prudential/capital flow measures
• Absorb/channel inflows:
• Broaden and deepen local capital markets
Rebalancing the policy mix between AEs an EMs
![Page 39: World real GDP growth in 2010 - Milken Institute · in five years As of Q1 2011 Rank Country Five-year cumulative probability of default (%) Rank Country Five-year cumulative probability](https://reader034.vdocuments.us/reader034/viewer/2022042200/5ea068b8b1dbf75d6030aea2/html5/thumbnails/39.jpg)
Advanced Economies
More structural policies
needed -- > Cleaning
• Banks:
• Mainly in Europe
• Transparency, Capital, Restructuring/Resolution
• Sovereigns:
• Most AEs
• Fiscal consolidation
• Households:
• Mainly in U.S., some European
• Reducing debt burdens
More structural policies
needed -- > Legacy issues
Emerging Markets
More macroeconomic policies
needed -- > Leaning
• Limit overheating and buildup of
financial risks:
• Tighten macro policies
• Use macro prudential/capital flow measures
• Absorb/channel inflows:
• Broaden and deepen local capital markets
More macroeconomic policies
needed -- > Cyclical/growth challenges
Rebalancing the policy mix between AEs an EMs