International Monetary Fund

Displaying 361-400 of 558 results

  • White Papers // Nov 2009

    What's The Damage? Medium-term Output Dynamics After Banking Crises

    This paper investigates the medium-term behavior of output following banking crises, and its association with pre- and post-crisis conditions and policies. The author finds that output tends to be depressed substantially following banking crises, with no rebound to the precrisis trend. However, growth does eventually tend to return to its...

    Provided By International Monetary Fund

  • White Papers // Nov 2009

    A Rule-Based Medium-Term Fiscal Policy Framework For Tanzania

    A zero net domestic financing (NDF) target has served Tanzania well in recent years, contributing to prudent expenditure policy, improved fiscal sustainability, and macroeconomic stability. Moving to a more flexible fiscal policy, however, may serve Tanzania better. The "Diamond rule" proposed in this paper incorporates a permanent hard ceiling on...

    Provided By International Monetary Fund

  • White Papers // Nov 2009

    Top-Down Budgeting - An Instrument To Strengthen Budget Management

    This paper examines the rationale for a top-down approach to budget preparation and approval, and discusses some factors that have to be considered when reorienting the budget process along these lines. The paper argues that the sequence in which budgetary decisions are taken matters, and that a strong top-down approach...

    Provided By International Monetary Fund

  • White Papers // Nov 2009

    Valuation Of Unlisted Direct Investment Equity

    This paper analyzes the seven valuation methods for unlisted direct investment equity included in the recently adopted IMF Balance of Payments and International Investment Position Manual, Sixth Edition (BPM6). Based on publicly available Danish data, the author tested the three methods that are generally applicable and find that the choice...

    Provided By International Monetary Fund

  • White Papers // Nov 2009

    The Role Of Financial Variables In Predicting Economic Activity In The Euro Area

    The U.S. business cycle typically leads the European cycle by a few quarters and this can be used to forecast euro area GDP. The author investigates whether financial variables carry additional information and uses vector autoregressions (VARs) which include the U.S. and the euro area GDPs as a minimal set...

    Provided By International Monetary Fund

  • White Papers // Nov 2009

    Treating Intangible Inputs As Investment Goods: The Impact On Canadian GDP

    This paper constructs a data set to document firms' expenditures on an identifiable list of intangible items and examines the implications of treating intangible spending as an acquisition of final (investment) goods on GDP growth for Canada. It finds that investment in intangible capital by 2002 is almost as large...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Optimal Policy With Occasionally Binding Credit Constraints

    The authors study optimal policy in a small-open economy in which a foreign borrowing constraint binds occasionally. In the model that they set up scope for policy arises because of the pecuniary externality stemming from the presence of a key relative price in the borrowing constraint. The objective of the...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Sovereign Wealth Funds And Financial Stability-An Event Study Analysis

    This paper examines financial stability issues that arise from the increased presence of sovereign wealth funds (SWFs) in global financial markets by assessing whether and how stock markets react to the announcements of investments and divestments to firms by SWFs using an event study approach. Based on 166 publicly traceable...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Monetary Policy Analysis And Forecasting In The World Economy: A Panel Unobserved Components Approach

    The practice of monetary policy analysis and forecasting is becoming increasingly informed by structural macroeconometric models. Indeed, leveraging recent advances in theoretical and empirical macroeconomics, the leading central banks have all developed sophisticated models of the monetary transmission mechanisms in their respective economies which serve as inputs into the conduct...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Fiscal Deficits And Current Account Deficits

    The effectiveness of recent fiscal stimulus packages significantly depends on the assumption of non-Ricardian savings behavior. The author shows that, under the same assumption, fiscal deficits can have worrisome implications if they turn out to be permanent. First, if they occur in large countries they significantly raise the world real...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Inflation Targeting At 20: Achievements And Challenges

    This paper provides an overview of inflation targeting frameworks and macroeconomic performance under inflation targeting. Inflation targeting frameworks are generally quite similar across countries, and a broad consensus has developed in favor of "flexible" inflation targeting. The evidence shows that, although inflation target ranges are missed frequently in most countries,...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Is The Canadian Housing Market Overvalued? A Post-Crisis Assessment

    Canadian house prices have increased significantly between 2003 and early 2008, with a marked downward trend since mid-2008, especially in the resource-rich western provinces. This paper estimates the evolution of equilibrium real home prices during this period in key provinces and finds that, following recent declines, home prices are now...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Hybrid Inflation Targeting Regimes

    This paper uses a DSGE model to examine whether including the exchange rate explicitly in the central bank's policy reaction function can improve macroeconomic performance. It is found that including an element of exchange rate smoothing in the policy reaction function is helpful both for financially robust advanced economies and...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Excessive Lending, Leverage, And Risk-Taking In The Presence Of Bailout Expectations

    The financial crisis that began in 2007 has brought to the fore the issues of excesses in lending, leverage, and risk-taking as some of the fundamental causes of this crisis. At the same time, in dealing with the financial crisis there have been large scale interventions by governments, often referred...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Monetary Policy And The Lost Decade: Lessons From Japan

    This paper investigates how monetary policy can help ward off a protracted deflationary slump when policy rates are near the zero bound by studying the experience of Japan during the "Lost Decade" which followed the asset-price bubble collapse in the early 1990s. Estimation results based on a structural model suggest...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    External Balance In Low Income Countries

    This paper offers a coherent empirical analysis of the determinants of the real exchange rate, the current account, and the net foreign assets position in low income countries. The paper focuses on indicators specific to low income countries, such as the quality of policies and institutions, the special access to...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Oil Prices And Bank Profitability: Evidence From Major Oil-Exporting Countries In The Middle East And North Africa

    This paper analyzes the relationship between oil price shocks and bank profitability. Using data on 145 banks in 11 oil-exporting MENA countries for 1994 - 2008, the author tests hypotheses of direct and indirect effects of oil price shocks on bank profitability. The results indicate that oil price shocks have...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    The Uncertainty Channel Of Contagion

    The 2007 subprime crisis in the U.S. triggered a succession of financial crises around the globe, reigniting interest in the contagion phenomenon. Not all crises, however, are contagious. This paper models a new channel of contagion where the degree of anticipation of crises, through its impact on investor uncertainty, determines...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Do Trading Partners Still Matter For Nigeria's Growth? A Contribution To The Debate On Decoupling And Spillovers

    Have developing and emerging market countries decoupled from the US enough to grow despite significant recession in the US? Using VAR models, this paper addresses this question for Nigeria in the context of the global crisis. The results seem to debunk the "Decoupling theory" and suggest there are still significant...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Access To Market Financing For IDA-eligible Countries-The Role Of External Debt And IMF-Supported Programs

    Exclusion restrictions used to identify demand and supply relationships for market financing among IDA recipients (past and present) show that poor credit ratings and high political instability adversely impact the supply of market finance. While the adverse effects of external debt on market access occur at very high levels for...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Determinants And Macroeconomic Impact Of Remittances In Sub-Saharan Africa

    The paper investigates the determinants and the macroeconomic role of remittances in sub-Saharan Africa, assembling the most comprehensive dataset available so far on remittances in the region and incorporating data on the diaspora. It finds that remittances are larger for countries with a larger diaspora or when the diaspora is...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Three Cycles: Housing, Credit, And Real Activity

    This paper examines the characteristics and co-movement of cycles in house prices, credit, real activity and interest rates in advanced economies during the past 25 years, using a dynamic generalized factor model. House price cycles generally lead credit and business cycles over the long term, while in the short to...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Global Market Conditions And Systemic Risk

    This paper examines several key global market conditions, such as a proxy for market uncertainty and measures of interbank funding stress, to assess financial volatility and the likelihood of crisis. Using Markov regime-switching techniques, it shows that the Lehman Brothers failure was a watershed event in the crisis, although signs...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Macro-Hedging For Commodity Exporters

    This paper uses a dynamic optimization model to estimate the welfare gains of hedging against commodity price risk for commodity-exporting countries. The introduction of hedging instruments such as futures and options enhances domestic welfare through two channels. First, by reducing export income volatility and allowing for a smoother consumption path....

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    The Liquidity And Liquidity Distribution Effects In Emerging Markets: The Case Of Jordan

    This paper analyzes the determinants of daily changes in Jordan's interbank market overnight rate. It not only quantifies the classic liquidity effect, but also uncovers a liquidity distribution effect on both sides of the market, and shows that their magnitude is a decreasing and convex function of the level of...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Analyzing Fiscal Space Using The MAMS Model: An Application To Burkina Faso

    This paper analyses economic implications and the transmission mechanisms of different options for creating and using fiscal space. For creating fiscal space, the author considers prioritizing expenditures, raising revenue, and scaled-up aid. Fiscal space is used for increasing health and education spending, infrastructure spending, or both. The analysis takes place...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Unconventional Central Bank Measures For Emerging Economies

    Unconventional central bank measures are playing a key policy role for many advanced economies in the 2007 - 09 global crisis. Are they playing a similar role for emerging economies? Emerging economies have widely used unconventional foreign exchange and domestic short-term liquidity easing measures. Their use of credit easing and...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Revisiting The Determinants Of Productivity Growth: What's New?

    This paper studies the main determinants of total factor productivity (TFP) growth using principal component analysis and a dynamic panel data model and, through a case study, explores key areas where accelerated reforms in the Maghreb countries would boost TFP gains. The results reveal that reforms targeted at attracting foreign...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    New Zealand Bank Vulnerabilities In International Perspective

    The global financial crisis is creating stress on banking systems across the world through funding and asset quality shocks. This paper combines different stress scenarios, as well as cross-country analysis, to assess New Zealand bank vulnerabilities to the global crisis and the domestic recession. It finds that a sharp worsening...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Australian Bank And Corporate Sector Vulnerabilities-An International Perspective

    This paper focuses on how the exposure to the corporate sector may impact the health of the Australian banking system. It also compares Australian banks with their international peers. Finally, it investigates banks' exposure to credit risk using the new Basel II Pillar 3 disclosure data. The analysis shows that...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Euro Area Sovereign Risk During The Crisis

    While the use of public resources is critical to cushion the impact of the financial crisis on the euro-area economy, it is key that the entailed fiscal costs not be seen by markets as undermining fiscal sustainability. From this perspective, to what extent do movements in euro area sovereign spreads...

    Provided By International Monetary Fund

  • White Papers // Sep 2009

    Revised System For The Classification Of Exchange Rate Arrangements

    Since 1998, the staff of the International Monetary Fund (IMF) has published a classification of countries' de facto exchange rate arrangements. Experience in operating this classification system has highlighted several challenges, notably: The residual category of managed floating has become overly heterogeneous; and intervention practices, which are used in characterizing...

    Provided By International Monetary Fund

  • White Papers // Sep 2009

    S?o Tom? And Pr?ncipe: Domestic Tax System And Tax Revenue Potential

    S?o Tom? and Pr?ncipe is very open and highly depends on imports resulting in high indirect tax revenue. At the same time, the production and export base are very narrow, leaving the authorities with a small domestic tax base. For these reasons, the country compares unfavorably with neighboring economies and...

    Provided By International Monetary Fund

  • White Papers // Sep 2009

    Constructing Forecast Confidence Bands During The Financial Crisis

    The author derives forecast confidence bands using a Global Projection Model covering the United States, the euro area, and Japan. In the model, the price of oil is a stochastic process, interest rates have a zero floor, and bank lending tightening affects the United States. To calculate confidence intervals that...

    Provided By International Monetary Fund

  • White Papers // Sep 2009

    What Determines Bond Market Development In Sub-Saharan Africa?

    This paper empirically analyzes the determinants of bond market development in a cross section of 23 sub-Saharan African (SSA) countries between 1990 and 2008. It considers the stage of development and the size of the bond market, as well as the historical, structural, institutional and macroeconomic factors driving bond market...

    Provided By International Monetary Fund

  • White Papers // Sep 2009

    Cointegrated TFP Processes And International Business Cycles

    A puzzle in international macroeconomics is that observed real exchange rates are highly volatile. Standard international real business cycle (IRBC) models cannot reproduce this fact. The author shows that TFP processes for the U.S. and the "Rest of the world," is characterized by a vector error correction (VECM) and that...

    Provided By International Monetary Fund

  • White Papers // Sep 2009

    Who Benefits From Capital Account Liberalization? Evidence From Firm-Level Credit Ratings Data

    This paper provides new firm-level evidence on the effects of capital account liberalization. Based on corporate foreign-currency credit ratings data and a novel capital account restrictions index, the author finds that capital controls can substantially limit access to, and raise the cost of, foreign currency debt, especially for firms without...

    Provided By International Monetary Fund

  • White Papers // Sep 2009

    International Risk Sharing During The Globalization Era

    Though theory suggests financial globalization should improve international risk sharing, empirical support has been limited. The author develops a simple welfare-based measure that captures how far countries are from the ideal of perfect risk sharing and then takes it to data and finds international risk sharing has, indeed, improved during...

    Provided By International Monetary Fund

  • White Papers // Sep 2009

    Controlling Capital? Legal Restrictions And The Asset Composition Of International Financial Flows

    How effective are capital account restrictions? This paper provides new answers based on a novel panel data set of capital controls, disaggregated by asset class and by inflows/outflows, covering 74 countries during 1995-2005. The author finds the estimated effects of capital controls to vary markedly across the types of capital...

    Provided By International Monetary Fund

  • White Papers // Sep 2009

    Accounting Discretion Of Banks During A Financial Crisis

    This paper shows that banks use accounting discretion to overstate the value of distressed assets. Banks' balance sheets overvalue real estate-related assets compared to the market value of these assets, especially during the U.S. mortgage crisis. Share prices of banks with large exposure to mortgage-backed securities also react favorably to...

    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 // 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

  • White Papers // Feb 2010

    Bank Credit During The 2008 Financial Crisis: A Cross-Country Comparison

    This paper empirically estimates the main determinants of bank credit growth during the 2008 financial crisis. Using a sample covering over 80 countries, this paper finds that larger bank credit booms prior to the crisis and lower GDP growth of trading partners are among the most important determinants of the...

    Provided By International Monetary Fund

  • White Papers // Feb 2010

    The Composition And Cyclical Behavior Of Trade Flows In Emerging Economies

    Trade flows data show that the composition and cyclical properties of imports are similar in developed economies and emerging markets (EM) but this is not the case for exports. Unlike developed economies, (i) EM export few or only a selective set of capital goods and (ii) capital good and overall...

    Provided By International Monetary Fund

  • White Papers // Feb 2010

    Inflation Targeting And The Crisis: An Empirical Assessment

    This paper appraises how countries with inflation targeting fared during the current crisis, with the goal of establishing the stylized facts that will guide and motivate future research. The author finds that since August 2008, IT countries lowered nominal policy rates by more and this loosening translated into an even...

    Provided By International Monetary Fund

  • White Papers // Feb 2010

    Lessons And Policy Implications From The Global Financial Crisis

    The ongoing global financial crisis is rooted in a combination of factors common to previous financial crises and some new factors. The crisis has brought to light a number of deficiencies in financial regulation and architecture, particularly in the treatment of systemically important financial institutions, the assessments of systemic risks...

    Provided By International Monetary Fund

  • White Papers // Sep 2008

    An Anatomy Of Credit Booms: Evidence From Macro Aggregates And Micro Data

    This paper studies the characteristics of credit booms in emerging and industrial economies. Macro data show a systematic relationship between credit booms and economic expansions, rising asset prices, real appreciations and widening external deficits. Micro data show a strong association between credit booms and leverage ratios, firm values, and banking...

    Provided By International Monetary Fund

  • White Papers // May 2007

    Oil Shocks And External Balances

    This paper studies the effects of demand and supply shocks in the global crude oil market on several measures of countries' external balance, including the oil and non-oil trade balances, the current account, and changes in net foreign assets (NFA) during 1975 - 2004. The authors explicitly take a global...

    Provided By International Monetary Fund

  • White Papers // Feb 2007

    External Linkages And Contagion Risk In Irish Banks

    The large and growing international linkages of big Irish banks expose them to idiosyncratic shocks arising in other countries. The authors analyze international interdependencies of Irish banks - during both normal times and in periods of large shocks or extreme events - using an existing methodology with distance to default...

    Provided By International Monetary Fund

  • White Papers // Jun 2009

    Exchange Rate Policy And Liability Dollarization: What Do The Data Reveal About Causality?

    The paper identifies the contemporaneous relationship between exchange rate policy and liability dollarization using three different definitions of dollarization. The presence of endogeneity makes the empirical identification elusive. The authors use identification through heteroskedasticity to solve the endogeneity problem in the present context (Rigobon, 2003). While the authors find that...

    Provided By International Monetary Fund

  • White Papers // May 2010

    Does Financial Globalization Induce Better Macroeconomic Policies?

    Monetary and fiscal policies around the world are in better shape today than two decades ago. This paper studies whether financial globalization has helped induce governments to pursue better macroeconomic policies (the "Discipline effect"). The empirical tests have two innovations. First, the authors recognize potential endogeneity of the observed capital...

    Provided By International Monetary Fund

  • White Papers // Sep 2002

    Asian Flu Or Wall Street Virus? Price And Volatility Spillovers Of The Tech And Non-Tech Sectors In The United States And Asia

    This paper, using T-GAI{CH models, finds that the United States has been the major source of price and volatility spillovers to stock markets in the Asian region during three different periods in the last decade: the pre-Long Term Capital Management crisis period, the "Tech bubble" period, and the "Stock market...

    Provided By International Monetary Fund

  • White Papers // Mar 2002

    Candidate Entry, Screening, and the Political Budget Cycle

    The authors investigate whether private information about citizens' competence in political office can be revealed by their entry and campaign expenditure decisions. They find that this depends on whether voters and candidates have common or conflicting interests; only in the former case can entry be revealing. They apply these results...

    Provided By International Monetary Fund

  • White Papers // Dec 2001

    Legal Central Bank Independence and Inflation in Latin America During the 1990s

    This paper reviews central banks' legal reform in Latin America during the 1 990s and discusses the status of central bank independence in the region. Based on this information, it builds a simplified index of central bank independence which, in addition to the commonly used criteria of political and economic...

    Provided By International Monetary Fund

  • White Papers // Oct 2010

    Why Has the Euro Been So Weak?

    The weakness of the euro has been surprising given the widely-held expectation that it would be a strong currency. This paper critically examines explanations for the slide in the euro, finding that many are questionable on conceptual or empirical grounds. Two explanations are instead advanced that appear to be consistent...

    Provided By International Monetary Fund

  • White Papers // May 2010

    Transition Economies: How Appropriate Is The Size And Scope Of Government?

    This paper assesses changes in the size and scope of government in 24 transition economies. Whereas these governments have retrenched in terms of public expenditures in relation to GDP, as well as public employment as a share of population, some indicators suggest that size remains high (e.g.. rising indebtedness, a...

    Provided By International Monetary Fund

  • White Papers // Nov 2010

    Forecasting U.S. Investment

    This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the authors and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the authors and are published...

    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 // 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 // Jul 2010

    Improving The Equity And Revenue Productivity Of The Icelandic Tax System

    The Icelandic authorities have launched a review of the tax system with a view to improving its income redistribution, growth orientation, and efficiency features, as well as increasing its revenue mobilization potential by 1-2 percentage points of Gross Domestic Product (GDP) over the medium term. The increased tax collections would...

    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

    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 // Nov 2010

    Asset Prices In Affine Real Business Cycle Models

    Recursive preferences and time variation in means and volatilities have become important features of consumption-based asset pricing literature. The introduction of these features into real business cycle (RBC) models has allowed the study of the joint behavior of real and financial variables along the business cycle. As the analysis of...

    Provided By International Monetary Fund

  • White Papers // Nov 2010

    Structural Breaks In Fiscal Performance: Did Fiscal Responsibility Laws Have Anything To Do With Them?

    In recent years, many countries have adopted Fiscal Responsibility Laws to strengthen fiscal institutions and promote fiscal discipline in a credible, predictable and transparent manner. Still, results on the effectiveness of these laws remain tentative. In this paper, the authors test empirically whether fiscal performance, measured as the level of...

    Provided By International Monetary Fund

  • White Papers // Nov 2010

    Bankers Without Borders? Implications Of Ring-Fencing For European Cross-Border Banks

    This paper presents a stylized analysis of the effects of ring-fencing (i.e., different restrictions on cross-border transfers of excess profits and/or capital between a parent bank and its subsidiaries located in different jurisdictions) on cross-border banks. Using a sample of 25 large European banking groups with subsidiaries in Central, Eastern...

    Provided By International Monetary Fund

  • White Papers // Nov 2010

    A Historical Public Debt Database

    This paper describes the compilation of the first truly comprehensive database on gross government debt-to-GDP ratios, covering nearly the entire IMF membership (174 countries) and spanning an exceptionally long time period. The database was constructed by bringing together a number of other datasets and information from original sources. For the...

    Provided By International Monetary Fund

  • White Papers // Oct 2010

    After The Crisis: Assessing The Damage In Italy

    Italy's deep-rooted structural problems resulted in an unsatisfactory productivity performance and a dismal growth over the last 15 years. The global financial crisis has exacerbated these long-standing weaknesses, taking a heavy toll on Italy's economy. With output back to its end- 2001 level, Italy's output losses associated with the crisis...

    Provided By International Monetary Fund

  • White Papers // Nov 2010

    Monetary And Fiscal Policy Interactions In The Post-war U.S.

    A New Keynesian model allowing for an Active Monetary and Passive Fiscal policy (AMPF) regime and a Passive Monetary and Active Fiscal policy (PMAF) regime is fit to various U.S. samples from 1955 to 2007. Data in the pre-Volcker periods strongly prefer an AMPF regime, but the estimation is not...

    Provided By International Monetary Fund

  • White Papers // Oct 2010

    Crisis And Recovery: Role Of The Exchange Rate Regime In Emerging Market Countries

    This paper examines the role of the exchange rate regime in explaining how emerging market economies fared in the recent global financial crisis, particularly in terms of output losses and growth resilience. After controlling for regime switches during the crisis, using alternative definitions for pegs, and taking account of other...

    Provided By International Monetary Fund

  • White Papers // Oct 2010

    On The Distributive Effects Of Terms Of Trade Shocks: The Role Of Non-tradable Goods

    The authors introduce non-tradable goods to the Heckscher-Ohlin-Samuelson (HOS) model to study the distributive effects of terms of trade shocks. They show that the employment of resources in activities producing exclusively for the local market induces a crucial association between domestic spending and factor demand and prices, which is absent...

    Provided By International Monetary Fund

  • White Papers // Oct 2010

    Business Cycle Fluctuations, Large Shocks, And Development Aid: New Evidence

    The authors examine the cyclical properties of development aid using bilateral data for 22 donors and over 100 recipients during 1970‒2005. The authors find that bilateral aid flows are on average procyclical with respect to business cycles in donor and recipient countries. However, they become countercyclical when recipient countries face...

    Provided By International Monetary Fund

  • White Papers // Oct 2010

    Deconstructing The International Business Cycle: Why Does A U.S. Sneeze Give The Rest Of The World A Cold?

    The 2008 crisis underscored the interconnectedness of the international business cycle, with U.S. shocks leading to the largest global slowdown since the 1930s. The authors estimate spillover effects across major advanced country regions in a Structural VAR (SVAR) using pre-crisis data. This new method freely estimates the contemporaneous correlation matrix...

    Provided By International Monetary Fund

  • White Papers // Oct 2010

    Spillovers From Europe Into Morocco And Tunisia

    This paper examines the economic and financial linkages between Morocco and Tunisia and their European partners. Using structural vector auto regressions, the authors find that growth shocks in European partner countries generate significant responses on growth in both Morocco and Tunisia. For Tunisia, exports and, to a much lesser extent,...

    Provided By International Monetary Fund

  • White Papers // Oct 2010

    The Impact Of The Great Recession On Emerging Markets

    This paper examines the impact of the recent global crisis on Emerging Market Economies (EMs). The cross-country analysis shows that the impact of the crisis was more pronounced in those EMs that had initial weaker fundamentals and greater financial and trade linkages. This effect is observed along a number of...

    Provided By International Monetary Fund

  • White Papers // Oct 2010

    Financial Contagion Through Bank Deleveraging: Stylized Facts And Simulations Applied To The Financial Crisis

    The financial crisis has highlighted the importance of various channels of financial contagion across countries. This paper first presents stylized facts of international banking activities during the crisis. It then describes a simple model of financial contagion based on bank balance sheet identities and behavioral assumptions of deleveraging. Cascade effects...

    Provided By International Monetary Fund

  • White Papers // Oct 2010

    International Capital Flows And Development: Financial Openness Matters

    Does capital flow from rich to poor countries? The authors revisit the Lucas paradox and explore the role of capital account restrictions in shaping capital flows at various stages of economic development. They find that, when accounting for the degree of capital account openness, the prediction of the neoclassical theory...

    Provided By International Monetary Fund