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

    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 // 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

    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 // 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...

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  • 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...

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  • 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...

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  • 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...

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  • 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

    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...

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  • 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...

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  • 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...

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  • 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 // Apr 2000

    How Accurate Are Private Sector Forecasts--Cross-Country Evidence From Consensus Forecasts Of Output Growth

    This article evaluates the performance of consensus forecasts of GDP growth for industrialized and developing countries. The question this article tries to address is how do forecasts errors differ across industrialized and developing countries? are forecasts efficient and biased? In this two key result, emerge. First, the record of failure...

    Provided By International Monetary Fund

  • White Papers // Jul 2000

    Large-Scale Post-Crisis Corporate Sector Restructuring

    This article summarizes the objectives, tasks, and modalities of large scale, post crisis corporate restructuring with a view to organize the policy choices and drawing some general conclusions. This article suggests that government-led restructuring efforts should integrate corporate and bank restructuring in a holistic and transparent strategy based on clearly...

    Provided By International Monetary Fund

  • White Papers // Dec 2003

    Volatility and Comovement in a Globalized World Economy: An Empirical Exploration

    The paper analyzes the evolution of volatility and cross-country co-movement in output, consumption, and investment fluctuations using two distinct datasets. The results suggest there have been a significant decline in the volatility of business cycle fluctuations and a slight increase in the degree of cyclical co-movement among industrialized countries over...

    Provided By International Monetary Fund

  • White Papers // Oct 2003

    The United States and the New Regionalism/ Bilateralism

    Current U.S. trade policy stresses establishing free trade areas (FTAs) with partners spanning the globe. Motivations include enhancing goods and services trade; stimulating investment flows; extending standards on intellectual property rights, labor, and the environment; and addressing geopolitical concerns. Simulations of FTAs with the United States highlight the importance of...

    Provided By International Monetary Fund

  • White Papers // Oct 2003

    Promoting Fiscal Transparency: The Complementary Roles of the IMF, Financial Markets and Civil Society

    This paper explores initiatives to date by the IMF, financial markets, and civil society organizations to assess and utilize information on fiscal transparency. The results of surveys and interviews of rating agency analysts and surveys of civil society organizations on their level of awareness of, and use of IMF fiscal...

    Provided By International Monetary Fund

  • White Papers // Oct 2003

    The U.S. Dollar And The Trade Deficit: What Accounts For The Late 1990s?

    Based on a version of the IMF?s new Global Economic Model (GEM), calibrated to analyze macroeconomic interdependence between the United States and the rest of the world, this paper asks to what extent an asymmetric productivity shock in the tradable sector of the economy may account for real exchange rate...

    Provided By International Monetary Fund

  • White Papers // Feb 2003

    The Choice Of Exchange Rate Regime And Monetary Target In Highly Dollarized Economies

    This paper examines the implications of high degrees of dollarization for the choice of exchange rate regime and the information content of various monetary aggregates in developing countries. It concludes that high degree of currency substitution argues for more fixed exchange rate regimes, may be appropriate. It is also determined...

    Provided By International Monetary Fund

  • White Papers // Dec 2001

    Import-Reducing Effect of Trade Barriers: A Cross-Country Investigation

    A comprehension empirical investigation is carried out to ascertain the import-reducing effect of trade protection barriers. This paper first presents a statistical summary of the status of global trade protection. Then, based on a monopolistic competition trade model and 1994 cross-country data on trade on trade barriers, trade flows and...

    Provided By International Monetary Fund

  • White Papers // Jul 2003

    The Role of Information In Driving FDI Flows: Host-Country Transparency And Source-Country Specialization

    This paper discusses a simple information-based model of FDI flows. On the one hand, the abundance of "intangible" capital in specialized industries in the source countries, which presumably generates expertise in screening investment projects in the host countries, enhances FDI flows. On the other hand, host-country corporate-transparency diminishes the value...

    Provided By International Monetary Fund

  • White Papers // Aug 2004

    Bank Consolidation and Performance

    This paper examines a large panel of more than 100 banks to study the effects of bank consolidation on performance. Overall it finds a positive and significant effect of bank consolidation on bank performance. Bank returns increase with consolidation, and insolvency risk is reduced. Additionally, the study suggests that mergers...

    Provided By International Monetary Fund

  • White Papers // Sep 2003

    International Versus Domestic Auditing of Bank Solvency

    This paper examines alternative ways to prevent losses from bank insolvencies. It is widely viewed that transparency in reporting bank balance sheets is a key element in reducing such losses. It is, however, unclear just how such transparency would be achieved. Current approaches to avoiding insolvencies generally involve international enforcement...

    Provided By International Monetary Fund

  • White Papers // Apr 2005

    Central Bank Losses and Experiences in Selected Countries

    Under normal circumstances, a central bank should be able to operate at a profit with a core level of earnings derived from seigniorage. The paper discusses the impact of losses on central bank operations and lays out the principles and practices for handling central bank losses. It is suggested that...

    Provided By International Monetary Fund

  • White Papers // Mar 2005

    Trade Costs and Location of Foreign Firms in China

    This study examines the determinants of entry into by foreign firms, using information on 515 Chinese industries at the provincial level during 1998-2001. The analysis, rooted in the new economic geography, focuses on market and supplier access within and outside the province of entry, as well as production and trade...

    Provided By International Monetary Fund

  • White Papers // Aug 2005

    Access to Bank Credit in Sub-Saharan Africa: Key Issues and Reform Strategies

    This study discusses issues of access to bank credit in Sub-Saharan Africa, and examines measures that could help facilitate access by the private sector to bank credit. It reviews in particular obstacles to credit small- and medium-scale enterprises and agriculture, and examines progress in the design and implementation of reform...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Fiscal Objectives In The Post IMF Program World: The Case Of Albania

    The paper discusses the challenges facing Albania's fiscal policy following the graduation from the IMF programs. It argues that Albania's public debt remains too high and needs to be reduced. Strengthening the fiscal framework, including by introducing a numerical fiscal rule, could help achieve this objective. This paper discusses two...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Estimating The Inflation-Growth Nexus - A Smooth Transition Model

    Motivated by the global inflation episode of 2007 - 08 and concern that high levels of inflation could undermine growth, this paper uses a panel of 165 countries and data for 1960 - 2007 to revisit the nexus between inflation and growth. The author uses a smooth transition model to...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Economic Transition And Health Care Reform: The Experience Of Europe And Central Asia

    This paper exploits the staggered adoption of major concurrent health reforms in countries in Europe and Central Asia after 1990 to estimate their impact on public health expenditure, utilization, and avoidable deaths. While the health systems all derived from the same paradigm under central planning, they have since introduced changes...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Asset Securitization And Optimal Retention

    This paper builds on recent research by Fender and Mitchell (2009) who show that if financial institutions securitize loans, retaining an interest in the equity tranche does not always induce the securitizer to diligently screen borrowers ex ante. The author first determines the conditions under which this scenario becomes binding...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Public Expenditures On Social Programs And Household Consumption In China

    This paper shows that increasing government social expenditures can make a substantive contribution to increasing household consumption in China. The paper first undertakes an empirical study of the relationship between the savings rate and social expenditures for a panel of OECD countries and provides illustrative estimates of their implications for...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    The Cyclicality Of Fiscal Policy In The Middle East And Central Asia: Is The Current Crisis Different?

    The countries of the Middle East and North Africa, and the Caucasus and Central Asia have the highest output volatility in the world. Fiscal policy is a powerful tool that can help dampen the business cycles. This paper analyzes the cyclical properties of fiscal policy in the region during the...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Competition And Firm Productivity: Evidence From Firm-Level Data

    This paper presents empirical evidence on the impact of competition on firm productivity. Using firm-level observations from the World Bank Enterprise Survey database, the author finds a positive and robust causal relationship between the proxies for competition and the measures of productivity, it's also found that countries that implemented product-market...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    ICT Equipment Investment And Growth In Low- And Lower-Middle-Income Countries

    While production of ICT equipment plays a subordinate role for economic growth in most of these countries, they do benefit from capital deepening arising from falling prices of ICT equipment. Adapting established growth accounting approaches to the data environment of low-income countries, the author quantifies the growth impacts of absorption...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    The Short-Run Macroeconomics Of Aid Inflows: Understanding The Interaction Of Fiscal And Reserve Policy

    The author develops a tractable open-economy new-Keynesian model with two sectors to analyze the short-term effects of aid-financed fiscal expansions. The author distinguishes between spending the aid, which is under the control of the fiscal authorities, and absorbing the aid - using the aid to finance a higher current account...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Precautionary Reserves: An Application To Bolivia

    Using precautionary savings models the author computes levels of optimal reserves for Bolivia. Because of Bolivia's reliance on commodity exports and little integration with capital markets, and focuses on current account shocks as the key balance of payments risk. These models generate an optimal level of net foreign assets ranging...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    International Commodity Price Shocks, Democracy, And External Debt

    This paper examines the effects that international commodity price shocks have on external debt using panel data for a world sample of 93 countries spanning the period 1970-2007. The main finding is that positive commodity price shocks lead to a significant reduction in the level of external debt in democracies,...

    Provided By International Monetary Fund

  • White Papers // Feb 2010

    Simulating Inflation Forecasting In Real-Time: How Useful Is A Simple Phillips Curve In Germany, The UK, And The US?

    This paper simulates out-of-sample inflation forecasting for Germany, the UK, and the US. In contrast to other studies, the author uses output gaps estimated with unrevised real-time GDP data. This exercise assumes an information set similar to that available to a policymaker at a given point in time since GDP...

    Provided By International Monetary Fund

  • White Papers // Feb 2010

    Yield Curve Dynamics And Spillovers In Central And Eastern European Countries

    This paper applies the models used to study yield curve dynamics and spillovers in the U.S. and other countries to Central and Eastern European countries (CEE countries). Using the Diebold, Rudebusch, and Aruoba (2006) dynamic version of the Nelson-Siegel representation of the yield curve, the paper finds that the two-way...

    Provided By International Monetary Fund

  • White Papers // Feb 2010

    Firm Productivity, Innovation And Financial Development

    How do firm-specific actions - in particular, innovation - affect firm productivity? And what is the role of the financial sector in facilitating higher productivity? Using a rich firm-level dataset, the author finds that innovation is crucial for firm performance as it directly and measurably increases productivity. Moreover, its effects...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Cross-Country Consumption Risk Sharing, A Long-Run Perspective

    This paper estimates an empirical nonstationary panel regression model that tests long-run consumption risk sharing across a sample of OECD and emerging market (EM) countries. This is in contrast to the existing literature on consumption risk sharing, which is mainly about risks at business cycle frequency. Since the methodology focuses...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Financial Liberalization, Structural Change, And Real Exchange Rate Appreciations

    This paper accounts for the appreciation of the real exchange rate in Mexico between 1988 and 2002 using a two sector dynamic general equilibrium model of a small open economy with two driving forces: (i) differential productivity growth across sectors and (ii) a decline in the cost of borrowing in...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    The U.S. Federal Debt Outlook: Reading The Tea Leaves

    The author shows that fiscal policies reflecting a primary balance response to higher debt in line with historic experience would significantly increase the likelihood of reaching the debt targets of the U.S. administration in the medium term. Deficits and debt are higher under current budgetary proposals and IMF projections for...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Oman: Banking Sector Resilience

    This paper assesses the impact of the global financial risks on Oman's banking system and highlights the remaining risks. It concludes that the liquidity and prudential measures introduced by the authorities mitigated the adverse effects of the crisis on the banking system. Banks continue to make profits despite higher provisioning....

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    The Influence Of "Big Brothers:" How Important Are Regional Factors For Uruguay?

    This paper examines the role played by regional factors in Uruguay, identifies the sources and transmission mechanisms of shocks stemming from the region, and assesses how vulnerable Uruguay is to a potential crisis in the region. Using a VAR model with block exogeneity restrictions, it finds that shocks from Argentina...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Caribbean Bananas: The Macroeconomic Impact Of Trade Preference Erosion

    This paper examines the macroeconomic effects of the erosion of trade preferences, with a focus on the export of Caribbean bananas to Europe. Estimates are made of the magnitude of implicit assistance provided over a period of three decades to eastern Caribbean countries through banana trade preferences. The value of...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Price Setting In A Model With Production Chains: Evidence From Sectoral Data

    Reconciling the high frequency of price changes at the micro level and their apparent rigidity at the aggregate level has been the subject of considerable debate in macroeconomics recently. In this paper I show that incorporating production chains in a standard New-Keynesian model replicates two stylized facts about the data....

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Basel Core Principles And Bank Risk: Does Compliance Matter?

    The recent financial crisis has sparked widespread calls for reforms of regulation and supervision. The initial reaction to the crisis was one of disbelief: how could such extensive financial distress emerge in countries where the supervision of financial risk had been thought to be the best in the world? Indeed,...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Budget Institutions And Fiscal Performance In Low-Income Countries

    This paper presents, for the first time, multi-dimensional indices of the quality of budget institutions in low-income countries. The indices allow for benchmarking against the performance of middle-income countries, across regions, and according to different institutional arrangements that deliver good fiscal performance. Using the constructed indices, the paper provides preliminary...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Fiscal Adjustment In Sudan: Size, Speed And Composition

    This paper aims to identify the optimal size, speed and composition of the medium-term fiscal adjustment in the context of Sudan's limited oil reserves. The permanently sustainable non-oil primary balance approach suggests the need for significant fiscal adjustment over the medium term, requiring a widening of the tax base. Cross-country...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Spillovers Of Domestic Shocks: Will They Counteract The "Great Moderation"?

    Even prior to the extreme volatility just observed, output growth volatility - following protracted decline - was flattening or mildly rising in some countries. More widespread was an increasing tendency from the mid-1990s for shocks in one country to transmit rapidly to other countries, creating the potential for heightened global...

    Provided By International Monetary Fund

  • White Papers // Feb 2010

    The Empirics Of Exchange Rate Regimes And Trade: Words Vs. Deeds

    This paper examines the impact of exchange rate regimes on bilateral trade while differentiating the effects of "Words" and "Deeds". The findings - based on an extended database for de jure and de facto exchange rate classifications - show that while fixed exchange rate regimes increase trade, there is no...

    Provided By International Monetary Fund