International Monetary Fund

Displaying 281-320 of 508 results

  • White Papers // Feb 2010

    The Global Integrated Monetary And Fiscal Model (GIMF)? Theoretical Structure

    This paper presents a comprehensive overview of the theoretical structure of the International Monetary Fund's Global Integrated Monetary and Fiscal Model (GIMF). GIMF is a multicountry dynamic general equilibrium model that is used extensively inside the IMF, and also at a small number of central banks, for policy and risk...

    Provided By International Monetary Fund

  • White Papers // Feb 2010

    Evaluation Of The Oil Fiscal Regime In Russia And Proposals For Reform

    Oil revenue plays a central role in Russia's economic development. Thus, the recent decline in oil production and investment, and the possible contribution of the current fiscal regime to these developments, have prompted a reassessment of the oil tax system in Russia. Some important changes have already been made, while...

    Provided By International Monetary Fund

  • White Papers // Feb 2010

    Optimal Monetary Policy With Overlapping Generations Of Policymakers

    This paper studies the effect of imperfect central bank commitment on inflationary outcomes. The author presents a model in which the monetary authority is a committee that consists of members who serve overlapping, finite terms. Older and younger generations of Monetary Policy Committee (MPC) members decide on policy by engaging...

    Provided By International Monetary Fund

  • White Papers // Feb 2010

    Constraints On Trade In The MENA region

    The author estimates gravity models to see whether trade volumes of countries in the MENA region are significantly lower than what would be expected given their economic, cultural and geographical characteristics. The empirical results show that the variables used in standard gravity models cannot explain a significant part of MENA's...

    Provided By International Monetary Fund

  • White Papers // Feb 2010

    Constraints On Growth In The MENA Region

    This paper contributes to the empirical literature on growth in the MENA region by attempting to quantify the impact of the various constraints faced by local businesses highlighted by the World Bank's Business Enterprise surveys. To the best of the author's knowledge the dataset has not been used in any...

    Provided By International Monetary Fund

  • White Papers // Feb 2010

    Systemic Risks And The Macroeconomy

    This paper presents a modeling framework that delivers joint forecasts of indicators of systemic real risk and systemic financial risk, as well as stress-tests of these indicators as impulse responses to structural shocks identified by standard macroeconomic and banking theory. This framework is implemented using large sets of quarterly time...

    Provided By International Monetary Fund

  • White Papers // Feb 2010

    Fiscal Policy In Oil Producing Countries During The Recent Oil Price Cycle

    This paper presents a detailed analysis of the average fiscal policy responses of oil producing countries (OPCs) to the recent oil price cycle. The author finds that OPCs worsened their non-oil primary balances substantially during 2003 - 2008 driven by an increase in primary spending. However, this trend was partially...

    Provided By International Monetary Fund

  • White Papers // Feb 2010

    Do Currency Fundamentals Matter For Currency Speculators?

    The author compares currency carry trades with an investment strategy based on currency fundamentals: taking a long (short) position in undervalued (overvalued) currencies. Carry trades have high risk-adjusted returns, but are subject to "Crash risk." In contrast, the fundamental strategy has lower risk-adjusted returns, but is less prone to crash...

    Provided By International Monetary Fund

  • White Papers // Feb 2010

    Cross-Border Investment In Small International Financial Centers

    This paper documents and assesses the role of small financial centers in the international financial system using a newly-assembled dataset. It presents estimates of the foreign asset and liability positions for a number of the most important small financial centers, and places these into context by calculating the importance of...

    Provided By International Monetary Fund

  • White Papers // Feb 2010

    Growth And Capital Flows With Risky Entrepreneurship

    This paper shows that the behavior of entrepreneurs facing incomplete financial markets and risky investment can explain why growth accelerations in developing countries tend to be associated with current account improvements. The uninsurable risk of losing invested capital forces entrepreneurs to rely on self-financing, so that when business opportunities open...

    Provided By International Monetary Fund

  • White Papers // Feb 2010

    Monetary Policy Transmission In Mauritius Using A VAR Analysis

    Applying commonly used vector autoregression (VAR) techniques, this paper investigates the transmission mechanism of monetary policy on output and prices for Mauritius, using data for 1999 - 2009. The results show that (i) an unexpected monetary policy tightening - an increase in the Bank of Mauritius policy interest rate -...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    Inflation In Tajikistan: Forecasting Analysis And Monetary Policy Challenges

    This paper attempts to explain short- and long-term dynamics of - and forecast - inflation in Tajikistan using the Vector Error Correction Model (VECM) and Autoregressive Moving Average Model (ARMA). By analyzing different transmission channels through the VECM, the author was able to evaluate their relative dominance, magnitude, and speed...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    After The Crisis: Lower Consumption Growth But Narrower Global Imbalances?

    This paper estimates consumption dynamics in the G-7 economies, paying particular attention to the possibility of precautionary behavior in the face of uncertainty. The author finds that in the short run, continued income uncertainty will significantly dampen consumption growth. As such, consumption in the G-7 economies is unlikely to be...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    Sovereign Default Risk And Private Sector Access To Capital In Emerging Markets

    Top down spillovers of sovereign default risk can have serious consequences for the private sector in emerging markets. This paper analyzes the effects of these spillovers using firm-level data from 31 emerging market economies. The author assesses how sovereign risk affects corporate access to international capital markets, in the form...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    Macrofinancial Linkages Of The Strategic Asset Allocation Of Commodity-Based Sovereign Wealth Funds

    This paper analyses the links between the investment strategies of a commodity-based SWF and the macroeconomic framework of the owner country. The author examines some basic macrofinancial linkages of an SWF's strategic asset allocation (SAA) strategies with regard to the government budget, monetary policy, and exchange rate movements. Based on...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    The Spillover Effects Of The Global Crisis On Economic Activity In MENA Emerging Market Countries-An Analysis Using The Financial Stress Index

    The estimated spillover of the global crisis to emerging market (EM) economies in the Middle East and North Africa (MENA) indicates that nearly two-thirds of the increased financial stress in MENA EM countries after the Lehman shock is attributable to direct or indirect spillovers of financial stress in advanced economies....

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    What Level Of Public Debt Could India Target?

    This paper discusses possible medium-term public debt targets for India, based on evidence from the economic literature on prudent levels of public debt and the feasibility for the country to meet a particular target over the next 5-6 years. While recognizing the challenges in determining an appropriate debt target, cross-country...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    Correlations In Emerging Market Bonds: The Role Of Local And Global Factors

    This paper examines the co-movement in emerging market bond returns and disentangles the influence of external and domestic factors. The conceptual framework, set in the context of asset allocation, allows one to describe the channels through which shocks originating in a particular emerging or mature market are transmitted across countries...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    Recovery Determinants Of Distressed Banks: Regulators, Market Discipline, Or The Environment?

    Based on detailed regulatory intervention data among German banks during 1994 - 2008, the author tests if supervisory measures affect the likelihood and the timing of bank recovery. Severe regulatory measures increase both the likelihood of recovery and its duration while weak measures are insignificant. With the benefit of hindsight,...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    International Pricing Of Emerging Market Corporate Debt: Does The Corporate Matter?

    The pricing of emerging market assets is thought to principally reflect changes in global sentiments and country risk. In turn, country risk is a reflection of a lack of sufficient information, agency problems (inability of a foreign lender to monitor a distant borrower), and sovereign risk. For these reasons, it...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    The Global Financial Crisis And Workers' Remittances To Africa: What's The Damage?

    One of the distinguishing features of the global financial crisis of 2007 - 09 is its effect on remittances. Until the financial crisis, remittances had proven to be a remarkably dependable source of income for households in developing economies, growing robustly regardless of the state of the business cycle. But...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    Financial Shocks And TFP Growth

    The paper investigates how changes in industries' funding costs affect total factor productivity (TFP) growth. Based on panel regressions using 31 U.S. and Canadian industries between 1991 and 2007, and using industries' dependence on external funding as an identification mechanism, the author shows that increases in the cost of funds...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    The Location Of Domestic And Foreign Production Affiliates By French Multinational Firms

    Economists interested in location choices usually focus their attention on investments abroad. This neglects the fact that multinational enterprises continue to invest domestically while undertaking foreign expansion. This paper compares investments at home and abroad. Our firm-level dataset shows an important home bias in productive investments. Part of this "Excessive"...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    An Estimated Model With Macrofinancial Linkages For India

    This paper develops a small open economy dynamic stochastic general-equilibrium model with macro-financial linkages. The model includes a financial accelerator - entrepreneurs are assumed to partially finance investment using domestic and foreign currency debt - to assess the importance of financial frictions in the amplification and propagation of the effects...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    Dissecting Taylor Rules In A Structural VAR

    This paper uncovers Taylor rules from estimated monetary policy reactions using a structural VAR on U.S. data from 1959 to 2009. These Taylor rules reveal the dynamic nature of policy responses to different structural shocks. The author finds that U.S. monetary policy has been far more responsive over time to...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    The Outlook For Financing Japan's Public Debt

    Despite the rapid rise in public debt and large fiscal deficits, Japanese Government Bond (JGB) yields have remained fairly stable. Possible factors include: Japan's sizeable pool of household savings, presence of large and stable institutional investors, and strong home bias. These factors are likely to persist for some time, but...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    Responding To Banking Crises: Lessons From Cross-Country Evidence

    A common legacy of banking crises is a large increase in government debt, as fiscal resources are used to shore up the banking system. Do crisis response strategies that commit more fiscal resources lower the economic costs of crises? Based on evidence from a sample of 40 banking crises the...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    China: Does Government Health And Education Spending Boost Consumption?

    Consumption in China is unusually low and has continued to decline as a share of GDP over the past decade. A key policy question is how to reverse this trend, and rebalance growth away from reliance on exports and investment and toward consumption. This paper investigates whether the sizable increase...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    The Impact Of The Global Crisis On Canada: What Do Macro-Financial Linkages Tell Us?

    This paper builds a Bayesian VAR estimation model of growth for Canada, by focusing specifically on the role of external and domestic financial indicators, including credit conditions. A variance decomposition shows that financial conditions explain one-third of the total variability in Canada's real GDP growth, although changes in U.S. real...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    Inherited Or Earned? Performance Of Foreign Banks In Central And Eastern Europe

    Using a combination of propensity score matching and difference-in-difference techniques the author investigates the impact of foreign bank ownership on the performance and market power of acquired banks operating in Central and Eastern Europe. This approach allows one to control for selection bias as larger but less profitable banks were...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    Investment By Large Firms In Argentina

    Strong growth in investment made a key contribution to the economic recovery in Argentina earlier this decade. This paper uses firm-level data to assess changes in financing constraints and the linkages between real investment at the firm level and macroeconomic developments in the real exchange rate and real interest rates....

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    Public Debt Sustainability And Management In A Compound Option Framework

    This paper introduces the Asset and Liability Management (ALM) compound option model. The model builds on the observation that the public sector net worth in a multi-period setting corresponds to the value of an option on an option on total government assets. Hence, the ALM compound option model is better...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    Post-Crisis Bank Behavior: Lessons From Mercosur

    Did the occurrence of systemic banking crises in the 1990s and 2000s significantly alter the behavior of banks in the Mercosur? The objective of this paper is to answer this question by analyzing changes in bank behavior after crises in the Mercosur region. To the author's knowledge, this is the...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    Estimating Poland's Potential Output: A Production Function Approach

    This paper develops a methodology based on the production-function approach to estimate potential output of the Polish economy. The paper concentrates on obtaining a robust estimate of the labor input by deriving Poland's natural rate of unemployment. The estimated unemployment gap is found to track well pressures on resource constraints....

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    Are Financial Crises Alike?

    This paper investigates whether financial crises are alike by considering whether a single modeling framework can fit multiple distinct crises in which contagion effects link markets across national borders and asset classes. The crises considered are Russia and LTCM in the second half of 1998, Brazil in early 1999, dot-com...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    Canada's Potential Growth: Another Victim Of The Crisis?

    This paper investigates the impact of the current financial crisis on Canada's potential GDP growth. Using a simple accounting framework to decompose trend GDP growth into changes in capital, labor services and total factor productivity, the author finds a sizeable drop in Canadian potential growth in the short term. The...

    Provided By International Monetary Fund

  • White Papers // Jan 2010

    Exchange Rate Choices Of Microstates

    In this paper the author firsts explain why most microstates (countries with less than 2 million inhabitants) have gained independence only in the last 30 years. Despite the higher costs and risks microstates face, their ability to better accommodate local preferences combined with a more integrated world economy probably explains...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    Systemic Liquidity Management In The U.A.E.: Issues And Options

    This paper analyzes the U.A.E.'s liquidity management framework in the context of the 2008 global financial crisis and the measures taken by the Central Bank of the U.A.E. to ease liquidity pressures in the second half of 2008. Drawing also on an empirical analysis of data for 15 U.A.E. banks...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    The General Data Dissemination System (GDDS)-A Reflection On Its First 12 Years And Plans For Taking It Forward

    The paper reviews the developments in the last 12 years that have influenced the evolution of the IMF's General Data Dissemination System, leading to reforms to enhance its role. The GDDS itself is part of a broader IMF Data Standards Initiative launched in 1996 to help address macroeconomic data deficiencies,...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    How Russia Affects The Neighborhood: Trade, Financial, And Remittance Channels

    The author tests the extent to which growth in the 11 CIS countries (excluding Russia) was associated with developments in Russia, overall, as well as through the trade, financial and remittance channels over the last decade or so. The results point to the continued existence of economic links between the...

    Provided By International Monetary Fund

  • White Papers // Sep 2010

    The Unequal Benefits Of Fuel Subsidies: A Review Of Evidence For Developing Countries

    This paper reviews evidence on the impact of fuel subsidy reform on household welfare in developing countries. On average, the burden of subsidy reform is neutrally distributed across income groups; a $0.25 decrease in the per liter subsidy results in a 6 percent decrease in income for all groups. More...

    Provided By International Monetary Fund

  • White Papers // Sep 2010

    The Effects Of The Global Crisis On Islamic And Conventional Banks: A Comparative Study

    This paper examines the performance of Islamic banks (IBs) and conventional banks (CBs) during the recent global crisis by looking at the impact of the crisis on profitability, credit and asset growth, and external ratings in a group of countries where the two types of banks have significant market share....

    Provided By International Monetary Fund

  • White Papers // Sep 2010

    Optimal Price Indices For Targeting Inflation Under Incomplete Markets

    In models with complete markets, targeting core inflation enables monetary policy to maximize welfare by replicating the flexible price equilibrium. The authors develop a two-sector two-good new-Keynesian model to study the optimal choice of price index in markets with financial frictions. They find that, in the presence of financial frictions,...

    Provided By International Monetary Fund

  • White Papers // Sep 2010

    To Starve Or Not To Starve The Beast?

    For thirty years prominent voices have advocated a policy of "starving the beast" - cutting taxes to force government spending cuts. This paper analyzes the macroeconomic and welfare consequences of this policy using a two-country general equilibrium model. Under several strong assumptions the policy, if fully implemented, produces domestic output...

    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,...

    Provided By International Monetary Fund

  • 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...

    Provided By International Monetary Fund

  • White Papers // Aug 2010

    Output And Unemployment Dynamics During The Great Recession: A Panel Unobserved Components Analysis

    This paper analyzes the sources of output and unemployment dynamics in the world economy during the Great Recession. This analysis is based on a panel unobserved components model of the world economy, disaggregated into its fifteen largest national economies. The authors find that excess supply pressure was primarily transmitted from...

    Provided By International Monetary Fund

  • White Papers // Aug 2010

    Fiscal Deficits, Public Debt, And Sovereign Bond Yields

    The recent sharp increase in fiscal deficits and government debt in many countries raises questions regarding their impact on long-term sovereign bond yields. While economic theory suggests that this impact is likely to be adverse, empirical results have been less clear cut, have generally ignored nonlinear effects of deficits and...

    Provided By International Monetary Fund

  • White Papers // Aug 2010

    A Monetary Policy Model Without Money For India

    A New Keynesian model estimated for India yields valuable insights. Aggregate demand reacts to interest rate changes with a lag of at least three quarters, with inflation taking seven quarters to respond. Inflation is inertial and persistent when it sets in, irrespective of the source. Exchange rate pass-through to domestic...

    Provided By International Monetary Fund

  • 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 // 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

    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...

    Provided By International Monetary Fund

  • 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...

    Provided By International Monetary Fund

  • 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 // May 2010

    Financial Innovation, The Discovery Of Risk, And The U.S. Credit Crisis

    Uncertainty about the riskiness of new financial products was an important factor behind the U.S. credit crisis. The authors show that a boom-bust cycle in debt, asset prices and consumption characterizes the equilibrium dynamics of a model with a collateral constraint in which agents learn "by observation" the true riskiness...

    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 // Mar 2008

    Calculating Sustainable Non-Mineral Balances As Benchmarks For Fiscal Policy: The Case Of Botswana

    This paper argues that the governance framework of cooperative banks may hamper raising capital, particularly at time of distress, complicating the bank resolution process?especially for large banks?and may not provide adequate incentives to control banks' management. Reforms should preserve the positive characteristics that make cooperative banks a valuable addition to...

    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 // Apr 2010

    Absorption Boom And Fiscal Stance: What Lies Ahead In Eastern Europe?

    This paper estimates revenue and expenditure pro-cyclicality with respect to output and domestic absorption in new member states of the European Union and Croatia to assess whether these countries used the boom years of 2003-07 to create sufficient fiscal space. The current crisis has found many countries short of fiscal...

    Provided By International Monetary Fund

  • White Papers // Apr 2010

    Growth Convergence And Spillovers Among Indian States: What Matters? What Does Not?

    Convergence and spillovers across countries and within countries are old, but recurrent policy concerns, and India is no exception to this rule. This paper examines convergence and spillovers across Indian states using non-stationary panel data techniques. Results on convergence among Indian states are generally found to be similar, but more...

    Provided By International Monetary Fund

  • White Papers // Apr 2010

    Bank Efficiency Amid Foreign Entry: Evidence From The Central American Region

    This paper investigates the efficiency of domestic and foreign banks in the Central American region during 2002-07. Using two main empirical approaches, Data Envelopment Analysis and Stochastic Frontier Analysis, the paper finds that foreign banks are not necessarily more efficient than their domestic counterparts. If anything, the regional banks that...

    Provided By International Monetary Fund

  • White Papers // Apr 2010

    Boom-Bust Cycle, Asymmetrical Fiscal Response And The Dutch Disease

    This paper examines the behavior of expenditure policy during boom-bust in commodity price cycles, and its implication for real exchange rate movements. To do so, the author introduces a Dutch disease model with downward rigidities in government spending to revenue shock. This model leads to a decoupling between real exchange...

    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

    Public Investment As A Fiscal Stimulus: Evidence From Japan's Regional Spending During The 1990s

    How effective was public investment in stimulating the Japanese economy during the economic stagnation of the 1990s? Using a dataset of regional public investment spending, this paper finds that investment multipliers were higher than for public consumption, although they were relatively low and declining over time. This paper also finds...

    Provided By International Monetary Fund

  • White Papers // Apr 2010

    Power Laws In Firm Size And Openness To Trade: Measurement And Implications

    Existing estimates of power laws in firm size typically ignore the impact of international trade. Using a simple theoretical framework, this paper shows that international trade systematically affects the distribution of firm size: the power law exponent among exporting firms should be strictly lower in absolute value than the power...

    Provided By International Monetary Fund

  • White Papers // Apr 2010

    The Global Financial Crisis And Its Impact On The Chilean Banking System

    This paper explores how the global turmoil affected the risk of banks operating in Chile, and provides evidence that could help strengthen work on vulnerability indicators and off-site supervision. The analysis is based on the study of default risk codependence, or CoRisk, between Chilean banks and global financial institutions. The...

    Provided By International Monetary Fund

  • White Papers // Apr 2010

    Balance Sheet Network Analysis Of Too-Connected-To-Fail Risk In Global And Domestic Banking Systems

    The recent financial crisis experienced in 2008/9 has raised concerns on the adverse consequences associated with externalities inherent in the financial system. One particular concern associated with the increased pace of globalization and financial integration is interconnectedness risk, or the Too-Connected-to-Fail (TCTF) problem. The TCTF problem, in turn, brings up...

    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