International Monetary Fund

Displaying 1-40 of 465 results

  • White Papers // Dec 2011

    Employment Protection and Business Cycles in Emerging Economies

    The authors build a small open economy, real business cycle model with labor market frictions to evaluate the role of employment protection in shaping business cycles in emerging economies. The model features matching frictions and an endogenous selection effect by which inefficient jobs are destroyed in recessions. In a quantitative...

    Provided By International Monetary Fund

  • White Papers // Jun 2011

    The Cost Of Volatile Investment In An Emerging Economy

    The author measures the welfare gains from eliminating fluctuations in investment in an emerging economy such as Argentina. The estimated welfare effects are an order of magnitude higher than those for the US and arise with moderate degrees of diminishing returns to investment. This paper calculates the welfare costs associated...

    Provided By International Monetary Fund

  • White Papers // Jun 2011

    The Role Of Monetary Policy In Turkey During The Global Financial Crisis

    Turkey is an interesting case study because it was one of the hardest hit emerging economies by the global financial crisis, with a year-over-year contraction of 15 percent during the first quarter of 2009. At the same time, anticipating the fallout from the crisis, the Central Bank of the Republic...

    Provided By International Monetary Fund

  • White Papers // May 2011

    Precautionary Savings And Global Imbalances In World General Equilibrium

    In this paper, the authors assess the implications of precautionary savings for global imbalances by considering a world economy model composed by the US, the Euro Area, Japan, China, oil-exporting countries, and the rest of the world. These areas are assumed to differ only with respect to GDP volatility which...

    Provided By International Monetary Fund

  • White Papers // May 2011

    Sectoral Composition Of Foreign Direct Investment And External Vulnerability In Eastern Europe

    In the run up to the global crisis, countries in Central Eastern and Southeastern Europe attracted large capital inflows and some of them built up large external imbalances. This paper investigates whether these imbalances are linked to the sectoral composition of FDI. It shows that FDI in the tradable sectors...

    Provided By International Monetary Fund

  • White Papers // May 2011

    Impact Of The Global Crisis On Banking Sector Soundness In Asian Low-Income Countries

    The paper takes stock of the impact of the global financial crisis that began in late 2007 on banking sectors of Asian low-income countries, by exploring bank-level data provided by Bankscope. The paper examines three key channels of possible crisis spillovers: exposures to valuation changes of mark-to-market financial assets, a...

    Provided By International Monetary Fund

  • White Papers // May 2011

    Did Export Diversification Soften The Impact Of The Global Financial Crisis?

    This paper considers the role of export diversification in determining trade outcomes during the global financial crisis. The impact of export diversification (or concentration) is measured by assessing three different dimensions of specialization. First, concentration by geographic destination is considered; that is, whether the bulk of exports from a country...

    Provided By International Monetary Fund

  • White Papers // Apr 2011

    Toward Inflation Targeting In Sri Lanka

    This paper develops a practical model-based Forecasting and Policy Analysis System (FPAS) to support a transition to an inflation forecast targeting regime in Sri Lanka. The FPAS model provides a relatively good forecast for inflation and a framework to evaluate policy trade-offs. The model simulations suggest that an open-economy inflation...

    Provided By International Monetary Fund

  • White Papers // Apr 2011

    Evidence On Productivity, Comparative Advantage, And Networks In The Export Performance Of Firms

    This paper tests the effect of comparative advantage, size, and networking on the firm probability of exporting. The closest theoretical framework is the one of Bernard, Redding, and Schott (2007), with firm heterogeneity across countries and industries. The authors use a recently assembled multi-country multi-industry firm level dataset, and construct...

    Provided By International Monetary Fund

  • White Papers // Apr 2011

    ICT, Financial Inclusion, And Growth: Evidence From African Countries

    This paper studies the impact of Information and Communication Technologies (ICT), especially mobile phone rollout, on economic growth in a sample of African countries from 1988 to 2007. Further, the authors investigate whether financial inclusion is one of the channels through which mobile phone development influences economic growth. In estimating...

    Provided By International Monetary Fund

  • White Papers // Apr 2011

    Reconsidering The Role Of Food Prices In Inflation

    Food prices are generally excluded from measures of inflation most closely watched by policymakers due either to their transitory nature or their higher volatility. However, in lower income countries, food price inflation is not only more volatile but also on average higher than nonfood inflation. Food inflation is also in...

    Provided By International Monetary Fund

  • White Papers // Mar 2011

    Fiscal Expectations Under The Stability And Growth Pact: Evidence From Survey Data

    The paper uses survey data to analyze whether financial market expectations on government budget deficits changed in France, Germany, Italy, and the United Kingdom during the period of the Stability and Growth Pact (SGP). The authors' findings indicate that accuracy of financial expert deficit forecasts increased in France. Convergence between...

    Provided By International Monetary Fund

  • White Papers // Mar 2011

    Modeling Inflation In Chad

    This paper examines the determinants of inflation in Chad using quarterly data from 1983:Q1 to 2009:Q3. The analysis is based on a single-equation model, completed by a structural vector auto regression model to capture inflation persistence. The results show that the main determinants of inflation in Chad are rainfall, foreign...

    Provided By International Monetary Fund

  • White Papers // Feb 2011

    Global Shocks And Their Impact On Low-Income Countries: Lessons From The Global Financial Crisis

    This paper investigates the short-run effects of the 2007 - 09 global financial crisis on growth in (mainly non-fuel exporting) Low-Income Countries (LICs). Four conclusions stand out. First, for many individual LICs, 2009 was not extraordinarily calamitous; however, aggregate LIC output declined sharply because LICs were unusually synchronized. Second, the...

    Provided By International Monetary Fund

  • White Papers // Feb 2011

    Overborrowing, Financial Crises And 'Macroprudential' Policy

    This paper studies over borrowing, financial crises and macro-prudential policy in an equilibrium model of business cycles and asset prices with collateral constraints. Agents in a decentralized competitive equilibrium do not internalize the negative effects of asset fire-sales on the value of other agents' assets compared with a constrained social...

    Provided By International Monetary Fund

  • White Papers // Feb 2011

    New Indicators For Tracking Growth In Real Time

    The authors develop monthly indicators for tracking growth in 32 advanced and emerging-market economies. They test the historical performance of the indicators and find that they do a good job at describing the business cycle. In a recursive out-of-sample forecasting exercise, they find that the indicators generally produce good GDP...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    How Does Trade Evolve In The Aftermath Of Financial Crises?

    The authors analyze trade dynamics following past episodes of financial crises. Using an augmented gravity model and 179 crisis episodes from 1970-2009, They find that there is a sharp decline in a country's imports in the year following a crisis - 19 percent, on average - and this decline is...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    A Barrel Of Oil Or A Bottle Of Wine: How Do Global Growth Dynamics Affect Commodity Prices?

    This paper investigates the causes of extreme fluctuations in commodity prices from 1990 to 2010. Analyzing two very distinct commodities - crude oil and fine wine, the authors find that macroeconomic factors are the main determinants of commodity prices. Although supply constraints have the expected effect, aggregate demand growth is...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Government Debt Issuance In The Euro Area: The Impact Of The Financial Crisis

    This paper documents and analyzes crisis-related changes in government debt issuance practices in the 16 euro zone countries and Denmark. Using a newly constructed database on primary market debt issuance during 2007 - 09, the authors find evidence of a shift away from pre-crisis standards of best funding practices -...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Armenia: An Assessment Of The Real Exchange Rate And Competitiveness

    This paper uses a range of different methodologies to estimate the equilibrium real exchange rate in Armenia with both single-country and panel estimation techniques. The authors estimate a country specific autoregressive distributed lag model and then proceed with the estimation of a co-integrated panel consisting of transition economies in Europe...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Investment Objectives Of Sovereign Wealth Funds-A Shifting Paradigm

    While SWF investment objectives to some extent reflect inherent characteristics, notable differences in Strategic Asset Allocation (SAA) exist even amongst SWFs of similar types. Even so, this paper shows that the global crisis may have changed SWF's asset allocations in ways that may not be ideal or justified in all...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Trade And Trade Finance In The 2008-09 Financial Crisis

    Global merchandise trade sharply declined in late 2008 and early 2009, and some press and financial market reports assigned a large role for the decline to trade finance. However, the available evidence suggests that shocks to trade finance were not the major factor in the decline in trade. Surveys of...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    To Fire Or To Hoard? Explaining Japan's Labor Market Response In The Great Recession

    The Great Recession pushed Japan's unemployment rate to historic highs, but the increase has been small by international standards and small relative to the large output shock. This paper explores Japan's cyclical labor market response to the global financial crisis. These findings suggest that the employment responsiveness has been historically...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Interpreting Currency Movements During The Crisis: What's The Role Of Interest Rate Differentials?

    Using an adaptation of the Uncovered Interest Parity (UIP) condition, this paper analyzes the drivers behind the large, symmetric exchange rate swings observed during the financial crisis of 2008 - 2010. Employing a Nelson-Siegel model, the authors estimate yield curves and decompose the exchange rate movements into changes they attribute...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    The Impact Of Fiscal Consolidation And Structural Reforms On Growth In Japan

    With Japan's public debt reaching historical levels, the need for fiscal consolidation and structural reforms have increased. As fiscal consolidation will require a sustained and large adjustment in the fiscal balance, its growth effect is a concern particularly for the short run. This paper uses the IMF's Global Integrated Monetary...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    How Does Political Instability Affect Economic Growth?

    This paper is to empirically determine the effects of political instability on economic growth. Using the system-GMM estimator for linear dynamic panel data models on a sample covering up to 169 countries, and 5-year periods from 1960 to 2004, the author find that higher degrees of political instability are associated...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    The Spanish Labor Market In A Cross-Country Perspective

    The Spanish labor market is not working: the unemployment rate is structurally very high; wages are not very responsive to labor market conditions, causing a high cyclicality of unemployment; and the labor market is highly dual. Compared with the EU15, Spanish labor market institutions and policies stand out by the...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    What Is Driving Financial De-dollarization In Latin America?

    In the last decade, a group of Latin American countries (Bolivia, Paraguay, Peru, and Uruguay) experienced a gradual, yet sustained decline in financial dollarization. This paper documents the stylized facts and uses a standard VAR approach to examine the drivers of both deposit and credit de-dollarization. It finds that the...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Capital Flows, Exchange Rate Flexibility, And The Real Exchange Rate

    This paper analyzes the impact of capital inflows and exchange rate flexibility on the real exchange rate in developing countries based on panel co-integration techniques. The results show that public and private flows are associated with a real exchange rate appreciation. Among private flows, portfolio investment has the highest appreciation...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    The Effects Of Housing Prices And Monetary Policy In A Currency Union

    The recent boom-and-bust cycle in housing prices has refreshed the debate on the drivers of housing cycles as well as the appropriate policy response. The authors analyze the case of Spain, where housing prices have soared since it joined the EMU. They present evidence based on a VAR model, and...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Monetary Policy Transmission In An Emerging Market Setting

    Some emerging economies have a relatively ineffective monetary policy transmission owing to weaknesses in the domestic financial system and the presence of a large and segmented informal sector. At the same time, small open economies can have a substantial monetary policy transmission through the exchange rate channel. In order to...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Asian Financial Integration: Trends And Interruptions

    The paper compares trends in financial integration within Asia with those in industrialized countries and other regional groups. Declines in cross-country dispersion in equity returns and interest rates suggest increased Asian integration, with the process interrupted by crises and global volatility. Cross-border equity and bond holdings have also increased, but...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    Lessons From The Financial Crisis On Modelling Systemic And Sovereign Risk

    The complex interactions, spillovers and feedbacks of the global crisis that began in 2007 remind us how important it is to improve the authors' analyzes and modelling of financial crises and sovereign risk. This paper provides a broad framework to examine how vulnerabilities can build up and suddenly erupt in...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    Macroeconomic Effects Of Public Pension Reforms

    The paper explores the macroeconomic effects of three public pension reforms, namely an increase in retirement age, a reduction in benefits and an increase in contribution rates. Using a five-region version of the IMF's Global Integrated Monetary and Fiscal model (GIMF), the authors find that public pension reforms can have...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    Learning About Inflation Measures For Interest Rate Rules

    Empirical evidence suggests that goods are highly heterogeneous with respect to the degree of price rigidity. The authors develop a DSGE model featuring heterogeneous nominal rigidities across two sectors to study the equilibrium determinacy and stability under adaptive learning for interest rate rules that respond to inflation measures differing in...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    European Financial Linkages: A New Look At Imbalances

    The authors document external investment positions among European Union countries at the start of the financial crisis through the creation of a new database comprising bilateral external financial asset and liabilities, excluding reserve assets and derivatives. While there are some gaps in the data, the overall coverage of reported bilateral...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    Japan's Quest For Growth: Exploring The Role Of Capital And Innovation

    As labor input in Japan shrinks with population aging, capital accumulation and productivity gains will drive growth over the medium-term. At the same time, a changing global landscape calls for a shift in export-oriented investment toward new markets and a new generation of products, as well as increased investment by...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    Estimating A Structural Model Of Herd Behavior In Financial Markets

    The authors develop a new methodology to estimate the importance of herd behavior in financial markets: They build a structural model of informational herding that can be estimated with financial transaction data. In the model, rational herding arises because of information-event uncertainty. They estimate the model using data on a...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    The Cost Of Private Debt Over The Credit Cycle

    The authors identify global and regional fluctuations in international private debt flows to emerging and developing countries using data on cross border loans and international bond issuance over 1993 - 2009. They estimate the effects of individual borrower characteristics as well as macroeconomic conditions on the cost of foreign borrowing...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    Into The Great Unknown: Stress Testing With Weak Data

    Stress testing has become the risk management tool du jour in the wake of the global financial crisis. In countries where the information reported by financial institutions is considered to be of sufficiently good quality, and supervisory and regulatory standards are high, stress tests can be of significant value. In...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    What Is Inflation?

    Consumers' cost of living depends on the prices of many goods and services and the share of each in the household budget. To measure the average consumer's cost of living, government agencies conduct household surveys to identify a basket of commonly purchased items and track over time the cost of...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Inflation Targeting Turns 20

    Of particular relevance, in the wake of the global commodity price spikes and financial shocks of the past three years, is whether inflation targeting is more resilient to shocks than are other policy frameworks. Throughout most of the period since inflation targeting was widely adopted, global macroeconomic conditions were benign...

    Provided By International Monetary Fund

  • White Papers // Feb 2011

    Global Shocks And Their Impact On Low-Income Countries: Lessons From The Global Financial Crisis

    This paper investigates the short-run effects of the 2007 - 09 global financial crisis on growth in (mainly non-fuel exporting) Low-Income Countries (LICs). Four conclusions stand out. First, for many individual LICs, 2009 was not extraordinarily calamitous; however, aggregate LIC output declined sharply because LICs were unusually synchronized. Second, the...

    Provided By International Monetary Fund

  • White Papers // Feb 2011

    Overborrowing, Financial Crises And 'Macroprudential' Policy

    This paper studies over borrowing, financial crises and macro-prudential policy in an equilibrium model of business cycles and asset prices with collateral constraints. Agents in a decentralized competitive equilibrium do not internalize the negative effects of asset fire-sales on the value of other agents' assets compared with a constrained social...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Government Debt Issuance In The Euro Area: The Impact Of The Financial Crisis

    This paper documents and analyzes crisis-related changes in government debt issuance practices in the 16 euro zone countries and Denmark. Using a newly constructed database on primary market debt issuance during 2007 - 09, the authors find evidence of a shift away from pre-crisis standards of best funding practices -...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Armenia: An Assessment Of The Real Exchange Rate And Competitiveness

    This paper uses a range of different methodologies to estimate the equilibrium real exchange rate in Armenia with both single-country and panel estimation techniques. The authors estimate a country specific autoregressive distributed lag model and then proceed with the estimation of a co-integrated panel consisting of transition economies in Europe...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    How Does Trade Evolve In The Aftermath Of Financial Crises?

    The authors analyze trade dynamics following past episodes of financial crises. Using an augmented gravity model and 179 crisis episodes from 1970-2009, They find that there is a sharp decline in a country's imports in the year following a crisis - 19 percent, on average - and this decline is...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    A Barrel Of Oil Or A Bottle Of Wine: How Do Global Growth Dynamics Affect Commodity Prices?

    This paper investigates the causes of extreme fluctuations in commodity prices from 1990 to 2010. Analyzing two very distinct commodities - crude oil and fine wine, the authors find that macroeconomic factors are the main determinants of commodity prices. Although supply constraints have the expected effect, aggregate demand growth is...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    Macroeconomic Effects Of Public Pension Reforms

    The paper explores the macroeconomic effects of three public pension reforms, namely an increase in retirement age, a reduction in benefits and an increase in contribution rates. Using a five-region version of the IMF's Global Integrated Monetary and Fiscal model (GIMF), the authors find that public pension reforms can have...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    Learning About Inflation Measures For Interest Rate Rules

    Empirical evidence suggests that goods are highly heterogeneous with respect to the degree of price rigidity. The authors develop a DSGE model featuring heterogeneous nominal rigidities across two sectors to study the equilibrium determinacy and stability under adaptive learning for interest rate rules that respond to inflation measures differing in...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    European Financial Linkages: A New Look At Imbalances

    The authors document external investment positions among European Union countries at the start of the financial crisis through the creation of a new database comprising bilateral external financial asset and liabilities, excluding reserve assets and derivatives. While there are some gaps in the data, the overall coverage of reported bilateral...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    Japan's Quest For Growth: Exploring The Role Of Capital And Innovation

    As labor input in Japan shrinks with population aging, capital accumulation and productivity gains will drive growth over the medium-term. At the same time, a changing global landscape calls for a shift in export-oriented investment toward new markets and a new generation of products, as well as increased investment by...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    Estimating A Structural Model Of Herd Behavior In Financial Markets

    The authors develop a new methodology to estimate the importance of herd behavior in financial markets: They build a structural model of informational herding that can be estimated with financial transaction data. In the model, rational herding arises because of information-event uncertainty. They estimate the model using data on a...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Investment Objectives Of Sovereign Wealth Funds-A Shifting Paradigm

    While SWF investment objectives to some extent reflect inherent characteristics, notable differences in Strategic Asset Allocation (SAA) exist even amongst SWFs of similar types. Even so, this paper shows that the global crisis may have changed SWF's asset allocations in ways that may not be ideal or justified in all...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Trade And Trade Finance In The 2008-09 Financial Crisis

    Global merchandise trade sharply declined in late 2008 and early 2009, and some press and financial market reports assigned a large role for the decline to trade finance. However, the available evidence suggests that shocks to trade finance were not the major factor in the decline in trade. Surveys of...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    To Fire Or To Hoard? Explaining Japan's Labor Market Response In The Great Recession

    The Great Recession pushed Japan's unemployment rate to historic highs, but the increase has been small by international standards and small relative to the large output shock. This paper explores Japan's cyclical labor market response to the global financial crisis. These findings suggest that the employment responsiveness has been historically...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Interpreting Currency Movements During The Crisis: What's The Role Of Interest Rate Differentials?

    Using an adaptation of the Uncovered Interest Parity (UIP) condition, this paper analyzes the drivers behind the large, symmetric exchange rate swings observed during the financial crisis of 2008 - 2010. Employing a Nelson-Siegel model, the authors estimate yield curves and decompose the exchange rate movements into changes they attribute...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    The Impact Of Fiscal Consolidation And Structural Reforms On Growth In Japan

    With Japan's public debt reaching historical levels, the need for fiscal consolidation and structural reforms have increased. As fiscal consolidation will require a sustained and large adjustment in the fiscal balance, its growth effect is a concern particularly for the short run. This paper uses the IMF's Global Integrated Monetary...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    How Does Political Instability Affect Economic Growth?

    This paper is to empirically determine the effects of political instability on economic growth. Using the system-GMM estimator for linear dynamic panel data models on a sample covering up to 169 countries, and 5-year periods from 1960 to 2004, the author find that higher degrees of political instability are associated...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    The Spanish Labor Market In A Cross-Country Perspective

    The Spanish labor market is not working: the unemployment rate is structurally very high; wages are not very responsive to labor market conditions, causing a high cyclicality of unemployment; and the labor market is highly dual. Compared with the EU15, Spanish labor market institutions and policies stand out by the...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    What Is Driving Financial De-dollarization In Latin America?

    In the last decade, a group of Latin American countries (Bolivia, Paraguay, Peru, and Uruguay) experienced a gradual, yet sustained decline in financial dollarization. This paper documents the stylized facts and uses a standard VAR approach to examine the drivers of both deposit and credit de-dollarization. It finds that the...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Capital Flows, Exchange Rate Flexibility, And The Real Exchange Rate

    This paper analyzes the impact of capital inflows and exchange rate flexibility on the real exchange rate in developing countries based on panel co-integration techniques. The results show that public and private flows are associated with a real exchange rate appreciation. Among private flows, portfolio investment has the highest appreciation...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    The Effects Of Housing Prices And Monetary Policy In A Currency Union

    The recent boom-and-bust cycle in housing prices has refreshed the debate on the drivers of housing cycles as well as the appropriate policy response. The authors analyze the case of Spain, where housing prices have soared since it joined the EMU. They present evidence based on a VAR model, and...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Monetary Policy Transmission In An Emerging Market Setting

    Some emerging economies have a relatively ineffective monetary policy transmission owing to weaknesses in the domestic financial system and the presence of a large and segmented informal sector. At the same time, small open economies can have a substantial monetary policy transmission through the exchange rate channel. In order to...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Asian Financial Integration: Trends And Interruptions

    The paper compares trends in financial integration within Asia with those in industrialized countries and other regional groups. Declines in cross-country dispersion in equity returns and interest rates suggest increased Asian integration, with the process interrupted by crises and global volatility. Cross-border equity and bond holdings have also increased, but...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    The Cost Of Private Debt Over The Credit Cycle

    The authors identify global and regional fluctuations in international private debt flows to emerging and developing countries using data on cross border loans and international bond issuance over 1993 - 2009. They estimate the effects of individual borrower characteristics as well as macroeconomic conditions on the cost of foreign borrowing...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    Into The Great Unknown: Stress Testing With Weak Data

    Stress testing has become the risk management tool du jour in the wake of the global financial crisis. In countries where the information reported by financial institutions is considered to be of sufficiently good quality, and supervisory and regulatory standards are high, stress tests can be of significant value. In...

    Provided By International Monetary Fund

  • White Papers // Oct 2010

    Monetary Policy Matters: New Evidence Based On A New Shock Measure

    Conventional VAR and non-VAR methods of identifying the effects of monetary policy shocks on the economy have found a negative output response to monetary tightening using U.S. data over the 1960s-1990s. However, the authors show that these methods fail to find this contractionary effect when the sample is restricted to...

    Provided By International Monetary Fund

  • White Papers // Oct 2010

    Government Investment And Fiscal Stimulus

    Effects of government investment are studied in an estimated neoclassical growth model. The analysis focuses on two dimensions that are critical for understanding government investment as a fiscal stimulus: implementation delays for building public capital and expected fiscal adjustments to deficit-financed spending. Implementation delays can produce small or even negative...

    Provided By International Monetary Fund

  • White Papers // Oct 2010

    Australian Banking System Resilience: What Should Be Expected Looking Forward? An International Perspective

    This paper reviews Australian banks' performance from an international perspective, with a focus on changes in capital and liquidity risk. The paper analyses the extent of any vulnerability that might arise from a potential deterioration in the funding markets and discusses whether liquidity rules, such as those being considered by...

    Provided By International Monetary Fund

  • White Papers // Oct 2010

    A Perspective On Predicting Currency Crises

    Currency crises are difficult to predict. It could be that the authors are choosing the wrong variables or using the wrong models or adopting measurement techniques not up to the task. The authors set up a Monte Carlo experiment designed to evaluate the measurement techniques. In this study, the methods...

    Provided By International Monetary Fund

  • White Papers // Oct 2010

    The Euro's Effect On Trade Imbalances

    When does trade become a one-way relationship? The authors study bilateral trade balances for a sample of 18 European countries over the period from 1948 through 2008. They find that, with the introduction of the euro, trade imbalances among euro area members widened considerably, even after allowing for permanent asymmetries...

    Provided By International Monetary Fund

  • White Papers // Oct 2010

    What Can International Cricket Teach Us About The Role Of Luck In Labor Markets?

    How important is luck in determining labor market outcomes? The authors address this question using a new dataset of all international test cricketers who debuted between 1950 and 1985. They present evidence that a player's debut performance is strongly affected by an exogenous source of variation: whether the debut series...

    Provided By International Monetary Fund

  • White Papers // Oct 2010

    Nonperforming Loans In The GCC Banking System And their Macroeconomic Effects

    According to a dynamic panel estimated over 1995 - 2008 on around 80 banks in the GCC region, the NPL ratio worsens as economic growth becomes lower and interest rates and risk aversion increase. This model implies that the cumulative effect of macroeconomic shocks over a three year horizon is...

    Provided By International Monetary Fund

  • White Papers // Oct 2010

    Monetary Transmission In Low Income Countries

    This paper reviews monetary transmission mechanisms in Low-Income Countries (LICs) to identify aspects of the channels that may operate differently in LICs relative to advanced and emerging economies. Given the weak institutional frameworks, reduced role of securities markets, imperfect competition in the banking sector and the resulting high cost of...

    Provided By International Monetary Fund

  • White Papers // Sep 2010

    How Commodity Price Curves And Inventories React To A Short-Run Scarcity Shock

    How does a commodity market adjust to a temporary scarcity shock which causes a shift in the slope of the futures price curve? The authors find long-run relationships between spot and futures prices, inventories and interest rates, which means that such shocks lead to an adjustment back towards a stable...

    Provided By International Monetary Fund

  • White Papers // Sep 2010

    Macroprudential Regulation Under Repo Funding

    The use of collateral has become one of the most widespread risk mitigation techniques. While it brings stabilizing effects to the individual lender the authors argue that it may exacerbate systemic risk through margin call activation. They show how a liquidity shock to the cash lender may propagate as a...

    Provided By International Monetary Fund

  • White Papers // Sep 2010

    Recent Credit Stagnation In The MENA Region: What To Expect? What Can Be Done?

    This paper examines the recent credit slowdown among Middle Eastern and North African (MENA) countries from three analytical angles. First, it finds that, similar to other regions and to its past history, a credit boom preceded the current slowdown, and that a protracted period of sluggish growth is likely going...

    Provided By International Monetary Fund

  • White Papers // Sep 2010

    Monetary Transmission Of Global Imbalances In Asian Countries

    The paper explores the linkages between the global and domestic monetary gaps, and estimates the effects of monetary gaps on output growth, inflation, and net saving rates using panel data for 20 Asian countries for 1980 - 2008. The authors find a significant pass-through of the global monetary gap to...

    Provided By International Monetary Fund

  • White Papers // Sep 2010

    Cyclical Behavior Of Inventories And Growth Projections: Recent Evidence From Europe And The United States

    In the United States and a few European countries, inventory behavior is mainly the outcome of demand shocks: a standard buffer-stock model best characterizes these economies. But most of the European countries are described by a modified buffer-stock model where supply shocks dominate. In contrast to the United States, inventories...

    Provided By International Monetary Fund