Oecd Economic Outlook: June 2001 (OCED economic outlook)

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Foreword Table of contents Conventional signs Summary of projections Editorial I. General assessment of the macroeconomic situation Overview of the current situation and prospects Global growth prospects have deteriorated Figure I.1. Downgraded growth expectations for 2001 Table I.1. Output growth Figure I.2. Confidence and leading indicators Table I.2. World trade summary A number of forces at work are supportive Box I.1. Policy and other assumptions underlying the projections Figure I.3. Two factors supporting economic activity Table I.3. General government financial balances The global downturn of economic activity may be relatively short-lived Table I.4. Unemployment, output gaps and inflation Table I.5. Current account balances Financial risks in a weaker world economy Will equity markets fall further as the economy weakens? Figure I.4. Equity market developments Figure I.5. Profits in the United States and Japan as a percentage of total sales How restricted is access to capital markets? Table I.6. Gross security issuance Figure I.6. Risk spreads in corporate bond markets Is private sector indebtedness excessive? Figure I.7. Private sector financial balances Figure I.8. Debt indicators for the United States Figure I.9. Debt indicators for Japan Are there weaknesses in the banking sector? Table I.7. Capital adequacy ratios in banking systems of selected OECD countries Figure I.10. Gross bad loans in United States banking system The global implications of a weaker US economy Figure I.11. Exports to the United States 1999 Figure I.12. Exports of computers in 1999 (per cent of total merchandise exports) Table I.8. Non-member Asian exports of office machines and telecommunications equipments Table I.9. US consumption of primary commodities Table I.10. External debt in selected emerging market economies Figure I.13. Scenario with a US recession in 2001 Table I.11. Indicators for assessing international economic linkages Policy requirements in OECD countries United States Box I.2. The Administration’s budgetary proposals: 2002 to 2011 Table I.12. The United States: The President's Tax Reduction Plan Figure I.14. Effective marginal tax rates in current and proposed tax systems Japan Box I.3. The Japanese life insurance industry Table I.13. Japanese banking system: risk management loans and loan-loss allowance The European Union Table I.14. Euro area : Summary of projections Box I.4. Meat crisis in the European Union Appendix: The medium-term reference scenario Box I.5. Assumptions underlying the medium-term reference scenario Table I.15. Medium-term reference scenario summary Table I.16. Fiscal trends in the medium-term reference scenario Figure I.15. Growth in labor productivity over the medium term Table I.17. Growth in potential GDP and its components II. Developments in individual OECD countries United States United States: Employment, income and inflation United States: Financial indicators United States: Demand and output United States: External indicators Japan Japan: Employment, income and inflation Japan: Financial indicators Japan: Demand and output Japan: External indicators Germany Germany: Employment, income and inflation Germany: Financial indicators Germany: Demand and output Germany: External indicators France France: Employment, income and inflation France: Financial indicators France: Demand and output France: External indicators Italy Italy: Employment, income and inflation Italy: Financial indicators Italy: Demand and output Italy: External indicators United Kingdom United Kingdom: Employment, income and inflation United Kingdom: Financial indicators United Kingdom: Demand and output United Kingdom: External indicators Canada Canada: Employment, income and inflation Canada: Financial indicators Canada: Demand and output Canada: External indicators Australia Australia: Demand, output and prices Austria Austria: Demand, output and prices Belgium Belgium: Demand, output and prices Czech Republic Czech Republic: Demand, output and prices Denmark Denmark: Demand, output and prices Finland Finland: Demand, output and prices Greece Greece: Demand, output and prices Hungary Hungary: Demand, output and prices Iceland Iceland: Demand, output and prices Ireland Ireland: Demand, output and prices Korea Korea: Demand, output and prices Luxembourg Luxembourg: Demand, output and prices Mexico Mexico: Demand, output and prices Netherlands Netherlands: Demand, output and prices New Zealand New Zealand: Demand, output and prices Norway Norway: Demand, output and prices Poland Poland: Demand, output and prices Portugal Portugal: Demand, output and prices Slovak Republic Slovak Republic: Demand, output and prices Spain Spain: Demand, output and prices Sweden Sweden: Demand, output and prices Switzerland Switzerland: Demand, output and prices Turkey Turkey: Demand, output and prices III.Developments in selected non-member economies Box III.1. Banking sector restructuring in Asian crisis countries China Table III.1. Projections for China The Russian Federation Table III.2. Projections for the Russian Federation Brazil Table III.3. Projections for Brazil IV. Fiscal implications of ageing: projections of agerelated spending Introduction The baseline projections Underlying assumptions Table IV.1. Assumptions for fertility, life expectancy and immigration Figure IV.1. Trends in old-age dependency ratios Table IV.2. Share of older workers (55-64), the very old (80+) and youth ratio (0-19) The baseline projections for public expenditure Box IV.1. Population projections and background assumptions Figure IV.2. Public pension spending in 2000 and changes 2000-2050 Table IV.3. Age-related spending Table IV.4. Decomposition of changes in old-age pension spending: 2000-2050 Total government spending, taxes and the primary deficit Table IV.5. Changes in spending, revenues and the primary balance Box IV.2. Ageing in a “stylised” country: the impact of deficits on debt Table IV.6. The impact of ageing in a “stylised” country, 2000-2050 Sensitivity tests Box IV.3. Assumptions subject to sensitivity analysis Table IV.7. Average impact of sensitivity tests on total age-related spending: 2000-2050 What are the policy options? Bibliography V. Challenges for tax policy inOECDcountries Box V.1. General principles guiding tax policy Trends in tax receipts and structure Figure V.1. Total tax revenue in OECD countries Table V.1. Total tax revenue as percentage of GDP Figure V.2. Evolution of the tax mix over time Figure V.3. Tax mix by source Taxation of saving and business activity Taxation and the performance of labour and product markets Figure V.4. Tax wedges on labour, 2000 Tax compliance, enforcement and decentralisation Table V.2. Attribution of tax revenues to sub-sectors of general government Figure V.5. Attribution of tax revenues to sub-sectors of general government Bibliography VI. Encouraging environmentally sustainable growth: experienceinOECD countries Increased use of economic instruments in environmental policy Table VI.1. Use of economic instruments in OECD countries Box VI.1. The advantages of economic instruments Box VI.2. Transactions and prices in US emission trading Figure VI.1. Emissions permit trading in the United States A double dividend? Economic instruments in use Policy implementation: competitiveness and distributional obstacles First movers Distributional consequences Figure VI.2. Share of energy in household consumption by level of income in selected OECD countries, 1998 Policy implementation: sectoral issues Agriculture Figure VI.3. Water prices in selected OECD countries Transport and energy Figure VI.4. Taxes on diesel and petrol as of 1.1.2000 Institutions for coordination Table VI.2. Environmental impact and regulatory assessment in selected OECD countries Cost-benefit analysis A role for the courts Table VI.3. Legal liability and standing in selected OECD countries Conclusions Bibliography VII. Productivity and firm dynamics: evidence from microdata Introduction and summary The role of firm-level data for the analysis of productivity dynamics Box VII.1. The firm-level data Productivity developments: the role of reallocation and withinfirm growth The decomposition of labour productivity Figure VII.1. Decomposition of labour productivity growth in manufacturing Figure VII.2. Decomposition of labour productivity growth in selected service sectors The decomposition of multifactor productivity Figure VII.3. Decomposition of multifactor productivity growth in manufacturing Firm dynamics and survival Figure VII.4. Turnover rates in broad sectors of OECD countries, 1989-94 Figure VII.5. Firm survival rates at different lifetimes, 1990s Figure VII.6. Average firm size of entering and exiting firms relative to incumbent firms Box VII.2. The size of firms across sectors and countries Some policy considerations Bibliography List of special chapters in recent issues of OECD Economic Outlook Statistical Annex Country classification Weighting scheme for aggregate measures National account reporting systems and base-years Annex Tables Annex Table 1. Real GDP Annex Table 2. Nominal GDP Annex Table 3. Real private consumption expenditure Annex Table 4. Real public consumption expenditure Annex Table 5. Real total gross fixed capital formation Annex Table 6. Real gross private non-residential fixed capital formation Annex Table 7. Real gross private residential fixed capital formation Annex Table 8. Real total domestic demand Annex Table 9. Real exports of goods and services Annex Table 10. Real imports of goods and services Annex Table 11. Output gaps Annex Table 12. Compensation per employee in the business sector Annex Table 13. Unit labour costs in the total economy Annex Table 14. GDP deflators Annex Table 15. Private consumption deflators Annex Table 16. Consumer price index Annex Table 17. Oil and other primary commodity markets Annex Table 18. Labour force Annex Table 19. Labour force participation rate Annex Table 20. Employment Annex Table 21. Unemployment rates: commonly used definitions Annex Table 22. Standardised unemployment rates Annex Table 23. Labour force, employment and unemployment Annex Table 26. Household saving rates Annex Table 27. Gross national saving Annex Table 28. General government total outlays Annex Table 29 . General government current tax and non-tax receipts Annex Table 30. General government financial balances Annex Table 31. General government structural balances Annex Table 32. General government primary balances Annex Table 33. General government net debt interest payments Annex Table 34. General government gross financial liabilities Annex Table 35. General government net financial liabilities Annex Table 36. Short-term interest rates Annex Table 37. Long-term interest rates Annex Table 38. Nominal exchange rates (vis-à-vis the US dollar) Annex Table 39. Effective exchange rates Annex Table 40. Export volumes Annex Table 41. Import volumes Annex Table 42. Export prices (average unit values) Annex Table 43. Import prices (average unit values) Annex Table 44. Competitive positions: relative unit labour costs Annex Table 45. Competitive positions: relative export prices Annex Table 46. Export performance for total goods Annex Table 47. Shares in World exports and imports Annex Table 48. Trade balances Annex Table 49. Non-factor services, net Annex Table 50. Investment income, net Annex Table 51. Current account balances Annex Table 52. Current account balances as a percentage of GDP Annex Table 53. Structure of current account balances of major world regions Annex Table 54. Semiannual demand and output projections Annex Table 55. Semiannual price, cost and unemployment projections Annex Table 56. Contributions to changes in real GDP in OECD countries Annex Table 57. Household wealth and indebtedness Annex Table 59. Central government financial balances Annex Table 60. Maastricht definition of general government gross public debt Annex Table 61. Monetary and credit aggregates: recent trends Annex Table 62. Export market growth and performance in manufactured goods Annex Table 63. Geographical structure of OECD trade