International Monetary Fund

Displaying 121-160 of 532 results

  • White Papers // Aug 2010

    Is Exchange Rate Stabilization An Appropriate Cure For The Dutch Disease?

    This paper evaluates how successful is a policy of exchange rate stabilization to counteract the negative effects of a Dutch Disease episode. The authors consider a small open economy model that incorporates nominal rigidities and a learning-by-doing externality in the tradable sector. The paper shows that leaning against an appreciated...

    Provided By International Monetary Fund

  • White Papers // Aug 2010

    A New Framework To Estimate The Risk Neutral Probability Density Functions Embedded In Options Prices

    Building on the widely-used double-lognormal approach by Bahra (1997), this paper presents a multi-lognormal approach with restrictions to extract risk-neutral probability density functions (RNPs) for various asset classes. The contributions are twofold: first, on the technical side, the paper proposes useful transformation/restrictions to Bahra's original formulation for achieving economically sensible...

    Provided By International Monetary Fund

  • White Papers // Aug 2010

    Sustainable Real Exchange Rates In The New EU Member States: What Did The Great Recession Change?

    The Great Recession affected export and import patterns in the sample countries, and these changes, coupled with a more volatile external environment, have profound impact on the estimates of real exchange rate misalignments and projections of sustainable real exchange rates. The authors find that real misalignments in several countries with...

    Provided By International Monetary Fund

  • White Papers // Aug 2010

    Estimates Of The Output Gap In Armenia With Applications To Monetary And Fiscal Policy

    This paper employs several econometric techniques to estimate the Armenian output gap. The findings indicate that the output gap is significantly positive in 2007 and 2008 and decreased dramatically in 2009. The paper uses these results to estimate a New Keynesian Phillips curve for Armenia, suggesting a significant role of...

    Provided By International Monetary Fund

  • White Papers // Aug 2010

    Can Global Liquidity Forecast Asset Prices?

    During the period leading up to the global financial crisis many asset classes registered rapid price increases. This coincided with a significant rise in global liquidity. This paper attempts to determine the extent to which the rise in asset prices was influenced by developments in global liquidity. The authors confirm...

    Provided By International Monetary Fund

  • White Papers // Aug 2010

    Islamic Banking: How Has It Diffused?

    This paper investigates the determinants of the pattern of Islamic bank diffusion around the world using country-level data for 1992 - 2006. The analysis illustrates that income per capita, share of Muslims in the population and status as an oil producer are linked to the development of Islamic banking, as...

    Provided By International Monetary Fund

  • White Papers // Aug 2010

    Measuring Financial Barriers Among East African Community Countries

    This paper seeks to quantify existing financial barriers among East African Community (EAC) member countries based on analysis of each member country's foreign exchange market. The primary contribution of this paper is the generation of an aggregate measure of financial barriers for the three relatively more advanced members (Kenya, Uganda,...

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  • White Papers // Aug 2010

    The Effectiveness Of Macroeconomic Commitment In Weak(er) Institutional Environments

    This paper analyzes the institutional conditions affecting the establishment and effectiveness of independent central banks and of budgetary institutions. It draws on the recent theory developed by North, Wallis and Weingast on the transition from a closed and fragile state to an open economic and political environment. The paper presents...

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  • White Papers // Aug 2010

    The Dynamic Effects Of Commodity Prices On Fiscal Performance In Latin America

    The recent boom and bust in commodity prices has raised concerns about the impact of volatile commodity prices on Latin American countries' fiscal positions. Using a novel quarterly data set??which includes unique country-specific commodity price indices and a comprehensive measure of public expenditures? This paper analyzes the dynamic effects of...

    Provided By International Monetary Fund

  • White Papers // Aug 2010

    A Macro Model Of The Credit Channel In A Currency Union Member: The Case Of Benin

    This paper applies and extends a theoretical model built by Agenor and Montiel (2007) by exploring the effectiveness of government bonds and monetary policy in a small, open, credit-based economy with a fixed exchange rate. The model is applied to Benin, a member of a currency union, using a general...

    Provided By International Monetary Fund

  • White Papers // Aug 2010

    Price Of Risk - Recent Evidence From Large Financials

    Probability of default (PD) measures have been widely used in estimating potential losses of, and contagion among, large financial institutions. In a period of financial stress however, the existing methods to compute PDs and generate loss estimates may vary significantly. This paper discusses three issues that should be taken into...

    Provided By International Monetary Fund

  • White Papers // Aug 2010

    Still Minding The Gap - Inflation Dynamics Duiing Episodes Of Persistent Large Output Gaps

    This paper studies inflation dynamics during 25 historical episodes in advanced economies where output remained well below potential for an extended period. The authors find that such episodes generally brought about significant disinflation, underpinned by weak labor markets, slowing wage growth, and, in many cases, falling oil prices. Indeed, inflation...

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  • White Papers // Aug 2010

    Dedollarization

    This paper provides a summary of the key policies that encourage dedollarization. It focuses on cases in which the authorities' intention is to gain greater control of monetary policy and draws on the experiences of countries that have successfully dedollarized. Unlike previous work on the subject, this paper examines both...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    The Cross-Country Incidence Of The Global Crisis

    The authors examine whether the cross-country incidence and severity of the 2008-2009 global recession is systematically related to pre-crisis macroeconomic and financial factors. They find that the pre-crisis level of development, increases in the ratio of private credit to GDP, current account deficits, and openness to trade are helpful in...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    The Dark Side Of Bank Wholesale Funding

    Banks increasingly use short-term wholesale funds to supplement traditional retail deposits. Existing literature mainly points to the "bright side" of wholesale funding: sophisticated financiers can monitor banks, disciplining bad but refinancing good ones. This paper models a "dark side" of wholesale funding. In an environment with a costless but noisy...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    Peru: Drivers Of De-dollarization

    Peru has successfully pursued a market-driven financial de-dollarization during the last decade. Dollarization of credit and deposit of commercial banks - across all sectors and maturities - has declined, with larger declines for commercial credit and time and saving deposits. The analysis presented in this paper confirms that de-dollarization has...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    Does Procyclical Fiscal Policy Reinforce Incentives To Dollarize Sovereign Debt?

    This paper explores the link between the cyclical patterns of macroeconomic and policy variables and the currency composition of domestic sovereign debt in emerging market countries. The empirical analysis is anchored in an equilibrium model, in which the dollarization of sovereign debt arises as a result of the optimal portfolio...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    Local Housing Market Cycle And Loss Given Default: Evidence From Sub-Prime Residential Mortgages

    This paper studies the impact of housing market cycles on loss given default (LGD). Previous studies have shown that the current loan-to-value ratio (CLTV) is the most important determinant of LGD. This paper establishes another linkage which is between the house price cycles before the time of mortgage origination and...

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  • White Papers // Jul 2010

    How Do International Financial Flows To Developing Countries Respond To Natural Disasters?

    This paper uses multivariate dynamic panel analysis to examine the response of international financial flows to natural disasters. The models estimated for a large sample of developing countries point to differentiated responses of specific types of financial flows. The results show that remittance inflows increase significantly in response to shocks...

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  • White Papers // Jul 2010

    China's Economic Growth: International Spillovers

    This paper presents some facts on China's role in the world economy and measures the impact of China's growth on growth in the rest of the world in the short and long term. Shortrun estimates based on VARs and error-correction models suggest that spillover effects of China's growth have increased...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    Budget Consolidation: Short-Term Pain And Long-Term Gain

    The paper evaluates the costs and benefits of fiscal consolidation using simulations based on the IMFs global DSGE model GIMF. Over the longer run, well-targeted permanent reductions in budget deficits lead to a considerable increase in both the growth rate and the level of output. The gains may be enhanced...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    Exchange Rate Assessment For Sub-Saharan Economies

    This paper provides an exchange rate assessment for sub-Saharan African economies by using methodologies similar to those developed by the International Monetary Fund's Consultative Group on Exchange Rate Issues. As in the World Economic Outlook (IMF, 2009a), the unbalanced panel dataset covers 182 countries from 1973 to 2014. The authors...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    The Macroeconomics Of Medium-Term Aid Scaling-Up Scenarios

    The publishers develop a model to analyze the macroeconomic effects of a scaling-up of aid and assess the implications of different policy responses. The model features key structural characteristics of low-income countries, including varying degrees of public investment efficiency and a learning-by-doing (LBD) externality that captures Dutch disease effects. On...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    Inflation And Conflict In Iraq: The Economics Of Shortages Revisited

    Containing inflation has turned out to be one of the most challenging aspects of economic management in Iraq. This paper posits that conventional as well as unconventional factors explain inflation dynamics in the recent past. The authors build a theoretical model based on the insights into the workings of socialist...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    External Finance, Sudden Stops, And Financial Crisis: What Is Different This Time?

    This paper develops a two-country DSGE model to investigate the transmission of a global financial crisis to a small open economy. The authors find that economies hit by a sudden stop arising from financial distress in the global economy are likely to face a more prolonged crisis than sudden stop...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    Should African Monetary Unions Be Expanded?

    This paper develops a full-fledged cost-benefit analysis of monetary integration, and applies it to the currency unions actively pursued in Africa. The benefits of monetary union come from a more credible monetary policy, while the costs derive from real shock asymmetries and fiscal disparities. The model is calibrated using African...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    Of Runes And Sagas: Perspectives On Liquidity Stress Testing Using An Iceland Example

    The global financial crisis revealed weaknesses in the stress testing exercises performed on financial institutions and systems around the world. These failures were most evident in the area of liquidity risk, where now-obvious vulnerabilities were left largely undetected, with stress tests having largely focused on solvency risk. This paper uses...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    Automatic Stabilizers And The Size Of Government: Correcting A Common Misunderstanding

    The size of government is a commonly used variable in many analytical studies on the effects of fiscal policy. An accepted practice is to measure it as the ratio of government spending to GDP. However, this is not the correct metric when computing the stabilization effects of nondiscretionary fiscal policy....

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  • White Papers // Jul 2010

    The Impact Of Capital And Foreign Exchange Flows On The Competitiveness Of Developing Countries

    Attracting capital and foreign exchange flows is crucial for developing countries. Yet, these flows could lead to real exchange rate appreciation and may thus have detrimental effects on competitiveness, jeopardizing exports and growth. This paper investigates this dilemma by comparing the impact of six types of capital and foreign exchange...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    Consensus Forecasts And Inefficient Information Aggregation

    Consensus forecasts are inefficient, over-weighting older information already in the public domain at the expense of new private information, when individual forecasters have different information sets. Using a cross-country panel of growth forecasts and new methodological insights, this paper finds that: consensus forecasts are inefficient as predicted; this is not...

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  • White Papers // Jul 2010

    Some Uncomfortable Arithmetic Regarding Europe's Public Finances

    Traditional fiscal indicators focused on measures of current deficits and debt miss the potentially important implications of current policies for future public finances. This could be problematic, including in the case of Europe, where population aging is expected to pose additional fiscal costs not captured by such indicators. To better...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    Sudden Stops, Output Drops, And Credit Collapses

    This paper proposes a tractable Sudden Stop model to explain the main patterns in firm level data in a sample of Southeast Asian firms during the Asian crisis. The model, which features trend shocks and financial frictions, is able to generate the main patterns observed in the sample during and...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    Public Capital And Growth

    This paper revisits the debate on the effect of public investment on growth by estimating a production function for forty-eight OECD and non-OECD countries, using capital stock as the explanatory variable. The results indicate that increases in public capital stock are positively correlated with growth, after controlling for the initial...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    Public Debt And Growth

    This paper explores the impact of high public debt on long-run economic growth. The analysis, based on a panel of advanced and emerging economies over almost four decades, takes into account a broad range of determinants of growth as well as various estimation issues including reverse causality and endogeneity. In...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    Democracy And Reforms: Evidence From A New Dataset

    Empirical evidence on the relationship between democracy and economic reforms is limited to few reforms, countries, and years. This paper studies the impact of democracy on the adoption of economic reforms using a new dataset on reforms in the financial, capital and banking sectors, product markets, agriculture, and trade for...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    The (Sizable) Role Of Rehypothecation In The Shadow Banking System

    This paper examines the sizable role of rehypothecation in the shadow banking system. Rehypothecation is the practice that allows collateral posted by, say, a hedge fund to its prime broker to be used again as collateral by that prime broker for its own funding. In the United Kingdom, such use...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    Determinants Of Foreign Direct Investment: A Sectoral And Institutional Approach

    Using a dataset which breaks down FDI flows into primary, secondary and tertiary sector investments and a GMM dynamic approach to address concerns about endogeneity, the paper analyzes various macroeconomic, developmental, and institutional/qualitative determinants of FDI in a sample of emerging market and developed economies. While FDI flows into the...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    A Method For Calculating Export Supply And Import Demand Elasticities

    Trade elasticities are often needed in applied country work for various purposes and this paper describes a method for estimating import demand and export supply elasticities without using econometrics. The paper reports empirical estimates of these elasticities for a large number of low, middle, and upper income countries. One task...

    Provided By International Monetary Fund

  • White Papers // Jul 2010

    Resource Windfalls And Emerging Market Sovereign Bond Spreads: The Role Of Political Institutions

    The authors examine the effect that revenue windfalls from international commodity price shocks have on sovereign bond spreads using panel data for 30 emerging market economies during the period 1997-2007. The main finding is that positive commodity price shocks lead to a significant reduction in the sovereign bond spread in...

    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 // Apr 2010

    Implementing Official Dollarization

    This paper identifies key aspects that countries willing to officially dollarize must necessarily address. Based on country experiences, it discusses the critical institutional bases that are necessary to unilaterally introduce a new legal tender, describes the relevant operational issues to smooth the transition toward the use of the new currency,...

    Provided By International Monetary Fund

  • White Papers // May 2010

    Fiscal Stimulus And Credibility In Emerging Countries

    Across a sample of thirty four emerging countries, the evidence shows the frequent existence of a pro-cyclical fiscal impulse. However, the scope for countercyclical policy increases with the availability of international reserves as it enhances credibility and mitigates concerns about the effect of expansionary fiscal policy on the cost of...

    Provided By International Monetary Fund

  • White Papers // May 2010

    Recoveries In the Middle East, North Africa, And Pakistan: Have Macroeconomic Policies Been Effective?

    This paper identifies and documents the properties of output gap recessions and recoveries in the Middle East, North Africa, and Pakistan (MENAP) during the 1980 to 2008 period. It goes on to investigate the key determinants of the recoveries. The duration of MENAP countries' recessions and recoveries has increased from...

    Provided By International Monetary Fund

  • White Papers // May 2010

    Fiscal Policy And The Current Account

    This paper examines the relationship between fiscal policy and the current account, drawing on a larger country sample than in previous studies and using panel regressions, vector autoregressions, and an analysis of large fiscal and external adjustments. On average, a strengthening in the fiscal balance by 1 percentage point of...

    Provided By International Monetary Fund

  • White Papers // May 2010

    Sovereign Spreads: Global Risk Aversion, Contagion Or Fundamentals?

    Over the past year, euro area sovereign spreads have exhibited an unprecedented degree of volatility. This paper explores how much of these large movements reflected shifts in (i) global risk aversion (ii) country-specific risks, directly from worsening fundamentals, or indirectly from spillovers originating in other sovereigns. The analysis shows that...

    Provided By International Monetary Fund

  • White Papers // May 2010

    ASEAN: A Chronicle Of Shifting Trade Exposure And Regional Integration

    The paper characterizes trade exposure and regional integration in six ASEAN economies during 1997−2008. For this, the paper uses the 2000 Asian Input Output Tables which are extrapolated using National Income Accounts and COMTRADE data. On the demand side, the paper shows that the level and geographical nature of external...

    Provided By International Monetary Fund

  • White Papers // May 2010

    The Linkage between The Oil And Non-Oil Sectors: A Panel VAR Approach

    Recent empirical studies have shown an inverse relation between natural resource intensity and long-term growth, implying that the natural resources generally impede economic growth through various channels (the "natural resource curse"). This paper departs from these studies by exploring the inter-sectoral linkages between oil and non-oil sectors in a cross-country...

    Provided By International Monetary Fund

  • White Papers // May 2010

    Determinants Of Investment Grade Status In Emerging Markets

    Emerging market countries seek investment grade status to lower financing costs for the sovereign, expand the pool of potential investors to institutional investors, and allow corporates the possibility of reducing their borrowing costs. Using a random effects binomial logit model on a sample of 48 emerging markets, the paper finds...

    Provided By International Monetary Fund

  • White Papers // May 2010

    Oil Windfalls In Ghana: A DSGE Approach

    The publishers use a calibrated multi-sector DSGE model to analyze the likely impact of oil windfalls on the Ghanaian economy, under alternative fiscal and monetary policy responses. They distinguish between the short-run impact, associated with demand-related pressures, and the medium run impact on competitiveness and growth. The impact on inflation...

    Provided By International Monetary Fund

  • White Papers // May 2010

    Short-Versus Long-Term Credit And Economic Performance: Evidence From The WAEMU

    This paper studies the link between financial development and economic growth in the West African Economic and Monetary Union (WAEMU). Using panel data for WAEMU countries over the period 1995-2006, the results suggest that while financial development does support growth in the region, long-term bank financing has a greater impact...

    Provided By International Monetary Fund

  • White Papers // May 2010

    Managing The Exit: Lessons From Japan's Reversal Of Unconventional Monetary Policy

    In responding to the global crisis, central banks in several advanced economies ventured beyond traditional monetary policy. A variety of unorthodox measures, including purchases of public and private assets, have significantly enlarged their balance sheets. As recoveries take hold, focus will increasingly shift from countering the Great Recession to orchestrating...

    Provided By International Monetary Fund

  • White Papers // May 2010

    Important Elements For Inflation Targeting For Emerging Economies

    This is the fifth chapter of a forthcoming monograph entitled "On Implementing Full-Fledged Inflation-Targeting Regimes: Saying What You Do and Doing What You Say." It examines whether certain conditions have to be met before emerging economies can adopt an inflation-targeting regime and provides some empirical evidence on the matter. The...

    Provided By International Monetary Fund

  • White Papers // May 2010

    Equity And Fiscal Policy: The Income Distribution Effects Of Taxation And Social Spending In Central America

    This paper is concerned with the distributional effects of taxation and social spending in Central America, taking the underlying distribution of resources as given. The paper surveys a number of existing tax and expenditure studies for the countries in the region, and assembles their underlying data in a coherent comparative...

    Provided By International Monetary Fund

  • White Papers // May 2010

    Fiscal Policy And Macroeconomic Stability: Automatic Stabilizers Work, Always And Everywhere

    The paper revisits the link between fiscal policy and macroeconomic stability. Two salient features of the analysis are (1) a systematic test for the government's ambivalent role as a shock absorber and a shock inducer - removing a downward bias present in existing estimates of the impact of automatic stabilizers...

    Provided By International Monetary Fund

  • White Papers // Apr 2010

    Cross-Border Financial Surveillance: A Network Perspective

    Effective cross-border financial surveillance requires the monitoring of direct and indirect systemic linkages. This paper illustrates how network analysis could make a significant contribution in this regard by simulating different credit and funding shocks to the banking systems of a number of selected countries. After that, the author shows that...

    Provided By International Monetary Fund

  • White Papers // Apr 2010

    House Price Determinants In Selected Countries Of The Former Soviet Union

    This paper analyses the recent boom-bust cycle in the housing markets of selected Former Soviet Union (FSU) countries. The analysis is based on a newly constructed database on house prices in the FSU countries. The estimations suggest that house price developments can largely be explained by the dynamics of fundamentals,...

    Provided By International Monetary Fund

  • White Papers // Apr 2010

    The Structural Manifestation Of The 'Dutch Disease': The Case Of Oil Exporting Countries

    The Dutch disease is the process by which a boom in a natural resource sector results in shrinking non-resource tradables. This process leads to increased specialization in the resource and non-tradable sectors leaving the economy more vulnerable to resource-specific shocks. This paper illustrates a theoretical model to examine the Dutch...

    Provided By International Monetary Fund

  • White Papers // Apr 2010

    The Global Credit Crunch And Foreign Banks' Lending To Emerging Markets: Why Did Latin America Fare Better?

    The recent global financial turmoil raised questions about the stability of foreign banks' financing to emerging market countries. While foreign banks' lending growth to most emerging market regions contracted sharply, lending to Latin America and the Caribbean (LAC) was significantly more resilient. Analyzing detailed BIS data on global banks' lending...

    Provided By International Monetary Fund

  • White Papers // Apr 2010

    Development Accounting And The Rise Of TFP

    This paper presents evidence that the contribution of differences in total factor productivity (TFP) to income differences across countries steadily increased between 1970 and 2000. The author verifies that the finding is neither imputable to measurement errors in input factors nor dependent on the assumption of factor neutral differences in...

    Provided By International Monetary Fund

  • White Papers // Apr 2010

    Quantitative Properties Of Sovereign Default Models: Solution Methods Matter

    This paper studies the sovereign default model that has been used to account for the cyclical behavior of interest rates in emerging market economies. This model is often solved using the discrete state space technique with evenly spaced grid points. The author shows that this method necessitates a large number...

    Provided By International Monetary Fund

  • White Papers // Apr 2010

    Collateral, Netting And Systemic Risk In The OTC Derivatives Market

    To mitigate systemic risk, some regulators have advocated the greater use of centralized counterparties (CCPs) to clear Over-The-Counter (OTC) derivatives trades. Regulators should be cognizant that large banks active in the OTC derivatives market do not hold collateral against all the positions in their trading book and the paper proves...

    Provided By International Monetary Fund

  • White Papers // Apr 2010

    Regulatory Capital Charges For Too-Connected-To-Fail Institutions: A Practical Proposal

    The recent financial crisis has highlighted once more that interconnectedness in the financial system is a major source of systemic risk. The author suggests a practical way to levy regulatory capital charges based on the degree of interconnectedness among financial institutions. Namely, the charges are based on the institution's incremental...

    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

    Effects Of Fiscal Stimulus In Structural Models

    The question of whether temporary fiscal stimulus can effectively stimulate aggregate demand has become the subject of a lively debate that is critical for future policy decisions. Empirical studies can provide some guidance, but their estimates are very dispersed, and they have difficulties identifying key issues including the interaction between...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    A Public Financial Management Framework For Resources-Producing Countries

    This paper overviews the challenges posed by resource revenues management and the policy prescriptions to meet them, and focuses on the Public Financial Management (PFM) framework and reforms that resource-producing countries should adopt. The paper outlines a PFM framework and reform path that take into account the institutional diversity of...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Tax Revenue Response To The Business Cycle

    This paper examines tax revenue during the business cycle by estimating the relationship between tax revenue efficiency and the output gap. The author finds a positive and significant relationship between these variables; results are consistent for quarterly and annual data, and across advanced and developing economies. The author also finds...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Crisis Management And Resolution For A European Banking System

    This paper proposes an integrated crisis management and resolution framework for the EU's single banking market. It comprises a European Resolution Authority (ERA), armed with the mandate and the tools to deal cost-effectively with failing systemic cross-border banks, and is designed to address many fundamental operational and incentive problems. It...

    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 // Apr 2010

    Transparency And Monetary Policy With Imperfect Common Knowledge

    Is it desirable that central banks be more transparent in the communication of sensible information when agents have diverse private information? In practice, there exists some consensus about the benefits of acting in this way. However, other studies warn that increasing the precision of public information may raise the volatility...

    Provided By International Monetary Fund

  • White Papers // Apr 2010

    Regional Financial Integration In The GCC

    This paper investigates the extent of regional financial integration in the member countries of the Gulf Cooperation Council. The limited volume data available suggests that regional integration is non-negligible. Bahrain and Kuwait investments especially are oriented towards the region. The development of stock markets in the region will also improve...

    Provided By International Monetary Fund

  • White Papers // Apr 2010

    Russia's Output Collapse And Recovery: Evidence From The Post-Soviet Transition

    The health of the Russian economy still depends heavily on natural resource revenues. The history of the economic collapse and recovery in 1970 - 2004 provides new evidence on the sources of Russian economic growth, while a survey of the economic literature suggests that the Russian economy could be viewed...

    Provided By International Monetary Fund

  • White Papers // Apr 2010

    Foreign Participation In Emerging Markets? Local Currency Bond Markets

    This paper estimates the impact of foreign participation in determining long-term local currency government bond yields and volatility in a group of emerging markets from 2000-2009. The results of a panel data analysis of 10 emerging markets show that greater foreign participation in the domestic government bond market tends to...

    Provided By International Monetary Fund

  • White Papers // Apr 2010

    The GCC Banking Sector: Topography And Analysis

    The economies of the country members of the Gulf Cooperation Council (GCC) share a number of commonalities. All GCC countries are large oil exporters with fixed exchange rate regimes, which exposes them to the vagaries of international oil prices. The similarities in economic structure imply common sources of strengths and...

    Provided By International Monetary Fund

  • White Papers // Apr 2010

    The Embodiment Of Intangible Investment Goods: A Q-Theory Approach

    This paper extends the q-theory of investment to model explicitly the decision of firms to invest in intangibles and measures the contribution of intangible goods to the overall capital stock in the U.S. The model highlights the embodiment of intangible goods in tangibles and the role of relative price movements...

    Provided By International Monetary Fund

  • White Papers // Apr 2010

    Monetary Policy Committees, Learning, And Communication

    This paper considers optimal communication by monetary policy committees in a model of imperfect knowledge and learning. The main policy implications are that there may be costs to central bank communication if the public is perpetually learning about the committee's decision-making process and policy preferences. When committee members have heterogeneous...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Inflation Expectations And Monetary Policy In India: An Empirical Exploration

    This paper pursues a computationally intensive approach to generate future inflation, followed by an exploration of the determinants of inflation expectations by estimating a new Keynesian type Phillips curve that takes into account country-specific characteristics, the stance of monetary and fiscal policies, marginal costs and exogenous supply shocks. The empirical...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Credit Conditions And Recoveries From Recessions Associated With Financial Crises

    Recoveries from recessions associated with a financial crisis tend to be sluggish. This paper presents evidence that stressed credit conditions are an important factor constraining the pace of recovery. In particular, using industry-level data, the author finds that industries relying more on external finance grow more slowly than other industries...

    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