Oecd Economic Outlook 2004/1 No. 75, June (Oecd Economic Outlook)

Table of contents......Page 4 Figures......Page 5 Conventional signs......Page 6 Summary of projections......Page 7 Editorial: Towards a Shared recovery......Page 8 Table I.1. The expansion gathers pace......Page 10 A two-speed recovery......Page 11 Figure I.2. Investment is picking up......Page 12 Box I.1. China and the global recovery......Page 13 Table: China opens up......Page 14 Figure I.3. Profits are not yet on the mend everywhere......Page 15 Figure I.5. Households save more in the euro area......Page 16 Figure I.6. Employment performance differs across countries......Page 17 Figure I.7. Headline and core inflation are tame......Page 19 Immediate prospects are favourable......Page 20 Figure I.9. Confidence has strengthened......Page 21 Figure I.10. Order books and inventories foreshadow rising output......Page 22 Policies and financial conditions are fairly supportive......Page 23 Box I.2. Policy and other assumptions underlying the central projections......Page 24 Figure I.11. Financial market conditions are supportive......Page 25 Figure I.12. Real effective exchange rates have moved......Page 26 The expansion should broaden......Page 27 Table I.3. Productivity growth rates should converge somewhat......Page 28 Table I.4. World trade picks up but external imbalances persist......Page 29 Uncertainties, risks and tensions: how robust are the projected recoveries?......Page 30 Figure I.13. Liquidity is ample and spreads are tight......Page 31 Figure I.14. Commodity and freight prices are rising rapidly......Page 32 How fast should monetary policy return to neutrality?......Page 33 Figure I.15. Massive foreign exchange intervention boosts base money but not bank lending......Page 34 Table I.5. Fiscal deterioration is most pronounced in the United States......Page 35 Table I.6. Tax cuts and spending increases have weakened fiscal positions......Page 36 Figure I.16. The US fiscal position is historically weak......Page 37 Figure I.17. Returning to balance is a moving target1......Page 38 Box I.3. Can the large OECD countries hope to grow out of their deficits?......Page 39 “Offshoring”, jobs and structural policies......Page 41 Table I.7. Employment in the US IT sector moves out but also up......Page 43 Table I.8. Medium-term reference scenario summary......Page 45 Box I.4. Assumptions underlying the medium-term reference scenario......Page 46 Table I.9. Fiscal trends in the medium-term reference scenario......Page 47 Table I.10. Growth in potential GDP and its components......Page 48 United States......Page 50 Japan......Page 54 Euro area......Page 58 Germany......Page 62 France......Page 66 Italy......Page 70 United Kingdom......Page 74 Canada......Page 78 Australia......Page 82 Austria......Page 84 Belgium......Page 86 Czech Republic......Page 88 Denmark......Page 90 Finland......Page 92 Greece......Page 94 Hungary......Page 96 Iceland......Page 98 Ireland......Page 100 Korea......Page 102 Luxembourg......Page 104 Mexico......Page 106 Netherlands......Page 108 New Zealand......Page 110 Norway......Page 112 Poland......Page 114 Portugal......Page 116 Slovak Republic......Page 118 Spain......Page 120 Sweden......Page 122 Switzerland......Page 124 Turkey......Page 126 III. Developments in selected non-member economies......Page 130 China......Page 131 Brazil......Page 132 The Russian Federation......Page 134 Introduction......Page 136 House price trends and variability differ......Page 137 Figure IV.1. Real house prices: average annual increase and variability......Page 138 Links between house prices, household wealth and consumption......Page 140 Figure IV.2. The cyclical behaviour of housing investment......Page 141 Box IV.1. Do house price increases add to net wealth?......Page 142 Mortgage debt and equity release have instrumental roles......Page 143 Table IV.3. Mortgage and housing market indicators......Page 144 The importance of mortgage institutions for the link between interest rates, house prices and consumption......Page 145 Figure IV.5. Effects of mortgage market completeness......Page 146 Table IV.4. Mortgage market completeness: range of mortgage products available and of borrowers served in eight European countries......Page 147 Table IV.5. Time required and cost of mortgage enforcement procedures......Page 149 Figure IV.6. Housing transaction costs......Page 150 The determinants of house price variability......Page 151 Figure IV.7. Real house prices variability and selected explanatory variables......Page 152 Housing market efficiency and resilience to shocks......Page 153 Bibliography......Page 155 Figure V.1. The US current account in historical perspective......Page 158 Figure V.2. Global current account balances in 2003......Page 159 Channel 1: The role of exchange rate depreciation......Page 161 Figure V.3. Real effective exchange rate and the current account balance in the United States......Page 162 Table V.1. Implied effective exchange rates in dollar depreciation scenarios......Page 163 Figure V.4. Real effective exchange rates and scenarios......Page 164 Channel 2: Higher national savings via fiscal consolidation......Page 166 Figure V.5. Negative correlation between public and private saving rates in the United States......Page 167 Table V.3. Episodes of large fiscal consolidation and interest rate levels......Page 168 Table V.4. Fiscal consolidation scenarios: key results......Page 169 Channel 3: Increase in US export share via supply-side improvement......Page 170 Table V.5. Selected estimates of income elasticities for the United States......Page 171 Figure V.6. US market performance......Page 173 Figure V.7. Growth in export market performance for G7 countries and Ireland......Page 174 Table V.6. Elasticity reversal scenario: key results......Page 175 Bibliography......Page 176 Introduction......Page 178 Table VI.1. Decomposing the fiscal stance in selected OECD countries......Page 180 Discretionary versus unplanned revenue shifts......Page 181 Table VI.2. Developments in direct tax ratios......Page 182 Figure VI.1. Residual revenues and the stock market......Page 183 Implications for the interpretation of the fiscal policy stance......Page 184 The effects of asset-price cycles on different revenue components......Page 185 Adjusting structural balances for capital gains revenue......Page 186 Figure VI.3. Capital gains taxes......Page 187 Figure VI.4. Fiscal balances adjusted for capital gains tax revenues......Page 188 Stock options......Page 190 Property, transaction and inheritance taxes......Page 191 Figure VI.5. Taxes on financial and capital transactions......Page 192 Dealing with exceptional sources of budget change......Page 193 “One-off” revenue operations......Page 194 Box VI.1. Country specific approaches to correct for asset-price effects......Page 195 Making adjustements for the impact of non-structural factors......Page 196 Appendix: Measuring discretionary and autonomous fluctuations in tax revenue......Page 197 Bibliography......Page 199 Table VII.1. Various convergence speeds......Page 202 Table VII.2. Estimated half-life convergence......Page 203 Drawing on available labour resources......Page 204 Figure VII.2. GDP per capita: Various convergence patterns, 2003......Page 205 Table VII.3. Main structural indicators......Page 206 Keeping a strong momentum for productivity......Page 208 Figure VII.3. FDI inflows and total investment......Page 209 Building knowledge-based economies in the longer term......Page 211 Table VII.4. Production of technology and R&D spendinga......Page 213 Bibliography......Page 215 Special chapters in recent issues of OECD Economic Outlook......Page 216 Statistical Annex......Page 218 Fiscal Balances and Public Indebtedness......Page 222 1. Real GDP......Page 224 2. Nominal GDP......Page 225 3. Real private consumption expenditure......Page 226 4. Real public consumption expenditure......Page 227 5. Real total gross fixed capital formation......Page 228 6. Real gross private non-residential fixed capital formation......Page 229 7. Real gross private residential fixed capital formation......Page 230 8. Real total domestic demand......Page 231 9. Foreign balance contributions to changes in real GDP......Page 232 10. Output gaps......Page 233 11. Compensation per employee in the business sector......Page 234 12. Labour productivity in the business sector......Page 235 13. Unemployment rates: commonly used definitions......Page 236 14. Standardised unemployment rates......Page 237 15. Labour force, employment and unemployment......Page 238 16. GDP deflators......Page 239 17. Private consumption deflators......Page 240 18. Consumer price indices......Page 241 19. Oil and other primary commodity markets......Page 242 20. Employment rates, participation rates and labour force......Page 243 21. Potential GDP, employment and capital stock......Page 244 22. Structural unemployment, wage shares and unit labour costs......Page 245 23. Household saving rates......Page 246 24. Gross national saving......Page 247 25. General government total outlays......Page 248 26. General government current tax and non-tax receipts......Page 249 27. General government financial balances......Page 250 28. Cyclically-adjusted general government balances......Page 251 29. General government primary balances......Page 252 30. Cyclically-adjusted general government primary balances......Page 253 31. General government net debt interest payments......Page 254 32. General government gross financial liabilities......Page 255 33. General government net financial liabilities......Page 256 Other Background Data......Page 223 34. Short-term interest rates......Page 257 35. Long-term interest rates......Page 258 36. Nominal exchange rates (vis-à-vis the US dollar)......Page 259 37. Effective exchange rates......Page 260 38. Export volumes of goods and services......Page 261 39. Import volumes of goods and services......Page 262 40. Export prices of goods and services......Page 263 41. Import prices of goods and services......Page 264 42. Competitive positions: relative consumer prices......Page 265 43. Competitive positions: relative unit labour costs......Page 266 44. Export performance for total goods and services......Page 267 45. Shares in world exports and imports......Page 268 46. Geographical structure of world trade growth......Page 269 47. Trade balances for goods and services......Page 270 48. Investment income, net......Page 271 49. Total transfers, net......Page 272 50. Current account balances......Page 273 51. Current account balances as a percentage of GDP......Page 274 52. Structure of current account balances of major world regions......Page 275 53. Export market growth in goods and services......Page 276 54. Import penetration......Page 277 55. Quarterly demand and output projections......Page 278 56. Quarterly price, cost and unemployment projections......Page 280 57. Contributions to changes in real GDP in OECD countries......Page 281 58. Household wealth and indebtedness......Page 283 60. Maastricht definition of general government gross public debt......Page 284 61. Monetary and credit aggregates: recent trends......Page 285 Irrevocable euro conversion rates......Page 219 National accounts reporting systems and base-years......Page 220 OECD Centers addresses......Page 288