Person:
Sugawara, Naotaka

Prospects Group, The World Bank

Fields of Specialization

International economics, International finance, Fiscal policy, Economic growth, Financial sector development

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Personal website

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Prospects Group, The World Bank

Last updated January 31, 2023

Biography

Naotaka Sugawara is a Senior Economist in the Prospects Group at the World Bank. Previously, he was an economist in the Research Department of the International Monetary Fund and in the World Bank’s Office of the Chief Economist for Europe and Central Asia. He also worked in the Poverty Reduction and Economic Management Unit of Europe and Central Asia Region and in the Development Research Group at the World Bank.

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Publication Search Results

Now showing 1 - 10 of 19

Fiscal Adjustment in Greece under the Financial Rescue Programme : The Distributional Effects on Greek Households

(Taylor and Francis, 2011-10-04) Sugawara, Naotaka

This article examines the distributional effects of the fiscal adjustment programme in Greece agreed with the European Commission (EC) and the International Monetary Fund (IMF) in 2010. It deals with adjustment measures that are front loaded and directly related to the household welfare: an increase in Value-Added Tax (VAT) and excise rates and a reduction in wages and pensions. Analysing these two effects reveals that the programme decreases the welfare of all households in Greece but that the adverse effects of the adjustment are mitigated in favour of the poor.
Would Liberalization Lead to Epidemic Cocaine Consumption?

(Taylor and Francis, 2012-03-05) Loayza, Norman V. ; Sugawara, Naotaka

This article uses cross-country data to estimate the potential effect of drastic reductions in the price of cocaine on the share of the population that consumes this drug. In order to identify movements along the cocaine consumption/demand function, this article instruments for cocaine prices with variables that affect the supply of cocaine. Liberalization of drug policies would produce an increase in the prevalence of cocaine consumption. However, the quantitative evidence presented here suggests that, even if substantial, this increase would not amount to epidemic cocaine use.
Bank Flows and Basel III—Determinants and Regional Differences in Emerging Markets

(World Bank, Washington, DC, 2011-04) Ghosh, Swati ; Sugawara, Naotaka ; Zalduendo, Juan

The global financial crisis has led to a range of reform proposals concerning the regulatory framework governing the banking sector collectively referred to as 'Basel III.' Although the proposed reforms are expected to generate substantial benefits by reducing the frequency and intensity of banking crises, concerns have been raised that, in the short term, the costs of moving to higher capital ratios may lead banks to raise their lending rates and reduce lending. This note explores the near-term implications of Basel III capital regulations on bank flows to emerging markets, based on an analysis of the key determinants of these flows.
The Crisis Hits Home : Stress-Testing Households in Europe and Central Asia

(World Bank, Washington, DC, 2010-05) Sugawara, Naotaka ; Sulla, Victor ; Taylor, Ashley ; Tiongson, Erwin R.

The financial crisis and economic downturn threatens the welfare of more than 160 million people who are poor or are just above the poverty line in the economies of Eastern and Central Europe, the former Soviet Union, and Turkey. This note concerns the findings of recent World Bank analysis (Tiongson et al. 2010) that uses precrisis household data and aggregate macroeconomic outcomes in these countries to simulate the impact of the crisis on households, transmitted via credit market shocks, price shocks, and income shocks. The adverse effects are widespread, with both poor and non-poor households being vulnerable. By 2010, for the region as a whole, it is estimated that some 11 million more people will be in poverty and more than 23 million additional people will find themselves just above the poverty line because of the crisis.
Credit-less Recoveries : Neither a Rare nor an Insurmountable Challenge

(World Bank, Washington, DC, 2013-05) Sugawara, Naotaka ; Zalduendo, Juan

This paper examines why some countries experience economic recoveries without pick-up of bank credit (credit-less) and how different this recovery pattern is from the case where credit is increased as an economy recovers (credit-with). To answer these questions, the paper uses quarterly data covering 96 countries and identifies 272 recovery episodes. It finds that more than 25 percent of all recoveries are credit-less and around 45 percent of all credit-less recoveries occurred in 2009-10. It also finds that output and investment growth tends to be lower in credit-less events but, by eight quarters after the trough date, the gap between credit-less and credit-with episodes is mostly exhausted. Results of the probit estimations show that the size of the downturn and the extent of external adjustment are associated with the likelihood of credit-less recoveries. Moreover, fiscal loosening tends to be related to credit-less events while monetary easing and a country's decision to seek an International Monetary Fund-supported program reduce the probability of credit-less recoveries. Finally, the model suggests that many countries in the Europe and Central Asia region were likely to experience credit-less recoveries following the global financial crisis in 2008/09. What is more worrisome for them is the fact that they are facing another negative external shock.
Global Waves of Debt: Causes and Consequences

(Washington, DC: World Bank, 2021-03-02) Kose, M. Ayhan ; Nagle, Peter ; Ohnsorge, Franziska ; Sugawara, Naotaka

The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.
A Mountain of Debt: Navigating the Legacy of the Pandemic

(World Bank, Washington, DC, 2021-10) Kose, M. Ayhan ; Ohnsorge, Franziska ; Sugawara, Naotaka

The COVID-19 pandemic has triggered a massive increase in global debt levels and exacerbated the trade-offs between the benefits and costs of accumulating government debt. This paper examines these trade-offs by putting the recent debt boom into a historical context. It reports three major findings. First, during the 2020 global recession, both global government and private debt levels rose to record highs, and at their fastest single-year pace, in five decades. Second, the debt-financed, massive fiscal support programs implemented during the pandemic supported activity and illustrated the benefits of accumulating debt. However, as the recovery gains traction, the balance of benefits and costs of debt accumulation could increasingly tilt toward costs. Third, more than two-thirds of emerging market and developing economies are currently in government debt booms. On average, the current booms have already lasted three years longer, and are accompanied by a considerably larger fiscal deterioration, than earlier booms. About half of the earlier debt booms were associated with financial crises in emerging market and developing economies.
Benefits and Costs of Debt: The Dose Makes the Poison

(World Bank, Washington, DC, 2020-02) Kose, M. Ayhan ; Ohnsorge, Franziska ; Sugawara, Naotaka

Government debt has risen substantially in emerging market and developing economies (EMDEs) since the global financial crisis. The current environment of low global interest rates and weak growth may appear to mitigate concerns about elevated debt levels. Considering currently subdued investment, additional government borrowing might also appear to be an attractive option for financing growth-enhancing initiatives such as investment in human and physical capital. However, history suggests caution. Despite low interest rates, debt was on a rising trajectory in half of EMDEs in 2018. In addition, the cost of rolling over debt can increase sharply during periods of financial stress and result in financial crises; elevated debt levels can limit the ability of governments to provide fiscal stimulus during downturns; and high debt can weigh on investment and long-term growth. Hence, EMDEs need to strike a careful balance between taking advantage of low interest rates and avoiding the potentially adverse consequences of excessive debt accumulation.
Global Recessions

(World Bank, Washington, DC, 2020-03) Kose, M. Ayhan ; Sugawara, Naotaka ; Terrones, Marco E.

The world economy has experienced four global recessions over the past seven decades: in 1975, 1982, 1991, and 2009. During each of these episodes, annual real per capita global gross domestic product contracted, and this contraction was accompanied by weakening of other key indicators of global economic activity. The global recessions were highly synchronized internationally, with severe economic and financial disruptions in many countries around the world. The 2009 global recession, set off by the global financial crisis, was by far the deepest and most synchronized of the four recessions. As the epicenter of the crisis, advanced economies felt the brunt of the recession. The subsequent expansion has been the weakest in the post-war period in advanced economies, as many of them have struggled to overcome the legacies of the crisis. In contrast, most emerging market and developing economies weathered the 2009 global recession relatively well and delivered a stronger recovery than after previous global recessions.
A Cross-Country Database of Fiscal Space

(World Bank, Washington, DC, 2017-08) Kose, M. Ayhan ; Kurlat, Sergio ; Ohnsorge, Franziska ; Sugawara, Naotaka

This paper presents a comprehensive cross-country database of fiscal space, broadly defined as the availability of budgetary resources for a government to service its financial obligations. The database covers up to 200 countries over the period 1990-2016, and includes 28 indicators of fiscal space grouped into four categories: debt sustainability, balance sheet vulnerability, external and private sector debt related risks as potential causes of contingent liabilities, and market access. The authors illustrate potential applications of the database by analyzing developments in fiscal space across three time frames: over the past quarter century; during financial crises; and during oil price plunges. The main results are as follows. First, fiscal space had improved in many countries before the global financial crisis. In advanced economies, following severe deteriorations during the crisis, many indicators of fiscal space have virtually returned to levels in the mid-2000s. In contrast, fiscal space has shrunk in many emerging market and developing economies since the crisis. Second, financial crises tend to coincide with deterioration in multiple indicators of fiscal space, but they are often followed by reduced reliance on short-term borrowing. Finally, fiscal space narrows in energy-exporting emerging market and developing economies during oil price plunges but later expands, often because of procyclical fiscal tightening and, in some episodes, a recovery in oil prices.