Read more about the article Fiscal Space in African Economies and Base Erosion and Profit Shifting (BEPS)

Fiscal Space in African Economies and Base Erosion and Profit Shifting (BEPS)

Base erosion and profit shifting (BEPS) involving multinational companies is a complex, multi-dimensional problem resulting from loopholes and inconsistencies between countries’ tax systems. Addressing it requires coordinated action at the international level. Several organizations have taken initiatives in this direction, including the Organization for Economic Co-operation and Development (OECD), which, with the support of the G20, launched an ambitious project to combat BEPS in 2013. The OECD has proposed 15 measures to strengthen international tax rules in various areas, including transfer pricing, combating harmful tax practices, preventing treaty abuse, and promoting transparency and tax information exchange. This study analyzes the challenges related to the fiscal space in Africa and examines the impact of BEPS on African economies. We examine the factors that exacerbate BEPS in the region, including the absence of relevant international tax laws, the dynamics of tax treaty negotiations, and limited tax administration capacity. We will also assess the negative impact of BEPS in Africa and discuss current initiatives to address BEPS in Africa, such as those proposed by the OECD. Finally, we discuss the challenges and offer policy recommendations for increasing fiscal space and reducing BEPS in Africa.

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Read more about the article An “unthinkable” U.S. public debt default

An “unthinkable” U.S. public debt default

The nominal debt ceiling is a crude and rudimentary barrier against excess public debt in the United States. Hope remains that the White House and Republicans will reach a deal on raising the debt ceiling in time to avoid what Secretary Yellen called "unthinkable" and "catastrophic". Some framework to deal with fiscal matters is needed, instead of nominal spending caps. But this transition need not happen via financial shocks and a possible default on public debt.

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Read more about the article The size of Biden’s fiscal package

The size of Biden’s fiscal package

According to Treasury Secretary Janet Yellen, it would be better to run the risk of excess than insufficiency. In addition, the Federal Reserve's new monetary policy regime puts the 2% inflation target as an average, not as a ceiling forcing monetary policy to act to prevent it in advance. After a long period of inflation below 2%, even in years with low unemployment and interest rates on the floor, monetary authorities can afford to wait some time with above-average inflation until they are compelled to pull the brake.

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Read more about the article Evidence-Based Design of Fiscal Policies for Gender Equality

Evidence-Based Design of Fiscal Policies for Gender Equality

Evidence-Based Design of Fiscal Policies for Gender Equality SPEAKERS Sanjeev Gupta, Deputy Director IMF Fiscal Affairs Department (Moderator) Mayra Buvinic, Senior Fellow Center for Global Development Otaviano Canuto, World Bank Executive Director Stephan Klasen, Professor University of Gottingen Rohini Pande, Professor Harvard University

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Read more about the article A straightjacket to Help Brazil Fight Fiscal Obesity

A straightjacket to Help Brazil Fight Fiscal Obesity

Brazil’s GDP contraction since mid-2014 has multiple non-fiscal roots but it has morphed into an unsustainable fiscal trajectory. Dealing with the latter has become a precondition for full economic recovery and the Brazilian government has submitted to Congress a constitutional amendment bill mandating a public spending cap for the next 20 years. This piece considers how the Brazilian landscape evolved toward such a precipice and why additional reforms – particularly on pensions – will have to be implemented to make the spending cap feasible.

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Read more about the article When it comes to fiscal policy, it’s better to save for a rainy day than to let it pour

When it comes to fiscal policy, it’s better to save for a rainy day than to let it pour

  While pro-cyclical fiscal policies – ie. expansionary fiscal policies in booms and contractionary fiscal stances in downturns – remain a common feature among developing countries, some countries have recently…

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Read more about the article Macroeconomics and Stagnation – Keynesian-Schumpeterian Wars

Macroeconomics and Stagnation – Keynesian-Schumpeterian Wars

Policy makers in the advanced economies at the core of the global financial crisis can make the claim that they prevented a new “Great Depression”. However, recovery since the outbreak of the crisis more than five years ago has been sluggish and feeble. Since these macroeconomic outcomes have to some extent been shaped by policy mixes adopted in those economies in response to the crisis, the appropriateness of those policy choices is a question worth revisiting. This is particularly the case as one considers the hypothesis that a long-run trend toward stagnation may have already been at play during the pre-crisis period, even if temporarily countervailed by pervasive asset price booms.

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