International Monetary Fund

Displaying 321-360 of 465 results

  • White Papers // Dec 2009

    Accounting For Global Dispersion Of Current Accounts

    This paper undertakes a quantitative analysis of the dispersion of current accounts in an open economy version of incomplete insurance model, incorporating important market frictions in trade and financial flows. Calibrated with conventional parameter values, the stochastic stationary equilibrium of the model with limited borrowing can account for about two-thirds...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    The Valuation Channel Of External Adjustment

    International financial integration has greatly increased the scope for changes in a country's net foreign asset position through the valuation channel, namely capital gains and losses on external assets and liabilities. The author examines this valuation channel in a dynamic equilibrium portfolio model with international trade in equity. By separating...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    Cyclical Patterns Of Government Expenditures In Sub-Saharan Africa: Facts And Factors

    This paper documents cyclical patterns of government expenditures in sub-Saharan Africa since 1970 and explains variation between countries and over time. Controlling for endogeneity, it finds government expenditures to be slightly more procyclical in sub-Saharan Africa than in other developing countries and some evidence that procyclicality in Africa has declined...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    Being A Foreigner Among Domestic Banks: Asset Or Liability?

    Studying a large number of banks in various countries between 1999 and 2006, the author documents that foreign banks perform better when from a high income country, when host country competition is limited, and when they are large and rely more on deposits for funding. Foreign banks' performance improves over...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    Who Disciplines Bank Managers?

    This paper brings to bear a hand-collected dataset of executive turnovers in U.S. banks to test the efficacy of market discipline in a 'Laboratory setting' by analyzing banks that are less likely to be subject to government support. Specifically, the author focuses on a new face of market discipline: stakeholders'...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    The Hedonic Country Product Dummy Method And Quality Adjustments For Purchasing Power Parity Calculations

    The 2005 International Comparison Program's (ICP) estimates of economy-wide purchasing power parity (PPP) are based on parity estimates for 155 basic expenditure headings, mainly estimated using country product dummy (CPD) regressions. The estimates are potentially inefficient and open to omitted variable bias for two reasons. First, they use average prices...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    Foreign Bank Entry And Credit Allocation In Emerging Markets

    This paper employees a unique data set containing bank-specific information to explore how foreign bank entry determines credit allocation in emerging markets. The author investigates the impact of the mode of foreign entry (greenfield or takeover) on banks' portfolio allocation to borrowers with different degrees of informational transparency, as well...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    A Framework To Assess The Effectiveness Of IMF Technical Assistance In National Accounts

    This paper analyzes the effectiveness of technical assistance provided by AFRITAC West (AFW) in the area of national accounts using the Fund's Technical Assistance Information Management System (TAIMS). The challenge has been to report on "Ultimate outcomes" (i.e., the production and dissemination of national accounts statistics along best international practices)...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    Growth Determinants Revisited

    This paper revisits the cross-country growth empirics debate using a novel Limited Information Bayesian Model Averaging framework to address model uncertainty in the context of a dynamic growth model in panel data with endogenous regressors. The empirical findings suggest that once model uncertainty is accounted for there is strong evidence...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    Oil Rents, Corruption, And State Stability: Evidence From Panel Data Regressions

    This paper examines the effects of oil rents on corruption and state stability exploiting the exogenous within-country variation of a new measure of oil rents for a panel of 31 oil-exporting countries during the period 1992 to 2005. The author finds that an increase in oil rents significantly increases corruption,...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    How Does Public External Debt Affect Corporate Borrowing Costs In Emerging Markets?

    Using data on syndicated loan issuances by emerging market firms, the author finds that an increase in the external debt of emerging market governments significantly raises the borrowing costs of the domestic corporate sector. This finding suggests that a higher level of public external debt "Crowds out" foreign credit to...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    Emerging Economy Responses To The Global Financial Crisis Of 2007-09: An Empirical Analysis Of The Liquidity Easing Measures

    This paper draws on a unique data set on the nontraditional systemic liquidity easing measures recently undertaken by many emerging market economies. It offers an empirical analysis of the key determinants affecting the decision to undertake these measures over the period September 2008 - March 2009. The paper finds that...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    Investment-Specific Productivity Growth: Chile In A Global Perspective

    By the end of 2007, Chile's total factor productivity was lower than ten years earlier, a performance that contrasted sharply with the previous decade, when productivity grew by a cumulative 30 percent. This paper assesses productivity trends in Chile, by decomposing productivity into investment-specific technological change (associated with improvements in...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    Inflation Targeting Pillars: Transparency And Accountability

    There are two key factors behind the move to increased transparency on the part of central banks. First is the relationship between transparency and the effectiveness of monetary policy. The second is the link between transparency and accountability. The way in which monetary policy is conducted by central banks has...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    Growth And Structural Reforms: A New Assessment

    This paper presents a simultaneous assessment of the relationship between economic performance and three groups of economic reforms: domestic finance, trade, and the capital account. Among these, domestic financial reforms, and trade reforms, are robustly associated with economic growth, but only in middle-income countries. In contrast, the author does not...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    Trade And Thy Neighbor's War

    This paper examines the spatial dispersion effects of regional conflicts, defined as internal or external armed conflicts in contiguous states, on international trade. The empirical findings - based on different measures of conflict constructed using alternate definitions of contiguity and conflict - reveal a significant collateral damage in terms of...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    Lost Decade In Translation: What Japan's Crisis Could Portend About Recovery From The Great Recession

    Is the recovery from the global financial crisis now secured? A strikingly similar crisis that stalled Japan's growth miracle two decades ago could provide some clues. This paper explores the parallels and draws potential implications for the current global outlook and policies. Japan's experiences suggest four broad lessons. First, green...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    Exchange Rate Assessments: Methodologies For Oil Exporting Countries

    Are the current account fluctuations in oil-exporting countries "Excessive"? How should their real exchange rate respond to the evolution of external (and domestic) fundamentals? This paper proposes methodologies tailored to the specific features of oil-exporting countries that help address these questions. Price-based methodologies (based on the time series of real...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    The Global Financial Crisis: Explaining Cross-Country Differences In The Output Impact

    The author provides one of the first attempts at explaining the differences in the crisis impact across developing countries and emerging markets. Using cross-country regressions to explain the factors driving growth forecast revisions after the eruption of the global crisis, the author finds that a small set of variables explain...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    Elasticity Optimism

    In most macroeconomic models, the substitutability between domestic and foreign goods is calibrated using aggregated data. This imposes homogeneous elasticities across goods, and the calibration is only valid under this assumption. If elasticities are heterogeneous, the aggregate substitutability is a weighted average of good-specific elasticities, which in general cannot be...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    The Housing Cycle In Emerging Middle Eastern Economies And Its Macroeconomic Policy Implications

    This paper examines housing finance and housing price dynamics in selected emerging Middle Eastern economies over the past two decades. It finds that (i) mortgage markets have experienced rapid development, which has led to lower private per capita consumer spending volatility this decade; (ii) a downward price correction occurred in...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    A Fistful Of Dollars: Lobbying And The Financial Crisis

    Using detailed information on lobbying and mortgage lending activities, the author finds that lenders lobbying more on issues related to mortgage lending (i) had higher loan-to-income ratios, (ii) securitized more intensively, and (iii) had faster growing portfolios. Ex-post, delinquency rates are higher in areas where lobbyist' lending grew faster and...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    Jointly Optimal Monetary And Fiscal Policy Rules Under Borrowing Constraints

    This paper studies the welfare properties of an economy where both monetary and fiscal policy follow simple rules, and where a subset of agents is borrowing constrained. The optimized fiscal rule is far more aggressive than automatic stabilizers, and stabilizes the income of borrowing constrained agents, rather than output. The...

    Provided By International Monetary Fund

  • White Papers // Dec 2009

    On The Sources Of Oil Price Fluctuations

    Analyzing macroeconomic impacts of oil price changes requires first to investigate different sources of these changes and their distinct effects. Kilian (2009) analyzes the effects of an oil supply shock, an aggregate demand shock, and a precautionary oil demand shock. This paper aims to model macroeconomic consequences of these shocks...

    Provided By International Monetary Fund

  • White Papers // Nov 2009

    Improving Surveillance Across The CEMAC Region

    This paper considers the design of the surveillance, and, in particular, the fiscal criteria in the Central African Economic and Monetary Community (CEMAC) with the view to ensuring they are consistent with internal and external sustainability. This consistency is important within a monetary union because fiscal policy is the primary...

    Provided By International Monetary Fund

  • White Papers // Nov 2009

    From Lombard Street To Avenida Paulista: Foreign Exchange Liquidity Easing In Brazil In Response To The Global Shock Of 2008-09

    The provision of foreign exchange liquidity by emerging market central banks during the global shock of 2008 - 09 departs from the domestic liquidity lender of last resort role described by Bagehot in his classic "Lombard Street." This paper documents and analyzes the foreign exchange liquidity providing measures of the...

    Provided By International Monetary Fund

  • White Papers // Nov 2009

    Institutional Factors And Financial Sector Development: Evidence From Sub-Saharan Africa

    The paper assesses the effects of certain institutional factors on financial sector development in Sub-Saharan Africa (SSA). Data Envelopment Analysis (DEA) is applied to determine the extent to which these institutions affect the financial sector, and to suggest which institutions play a more critical role in each country. Results suggest...

    Provided By International Monetary Fund

  • White Papers // Nov 2009

    Countercyclical Macro Prudential Policies In A Supporting Role To Monetary Policy

    This paper explores how prudential regulations can support monetary policy in reducing output fluctuations while maintaining financial stability. It uses a new framework that blends a standard model for monetary policy analysis with a contingent claims model of financial sector vulnerabilities. The results suggest that binding countercyclical prudential regulations can...

    Provided By International Monetary Fund

  • White Papers // Nov 2009

    Macroeconomic Implications For Hong Kong SAR Of Accommodative U.S. Monetary Policy

    This paper discusses the potential macroeconomic implications for Hong Kong SAR of accommodative monetary policy in the United States. It shows, through model simulations, that a resumption of the credit channel in Hong Kong SAR has the potential to create inflation in both goods and asset markets. Expansionary financial conditions...

    Provided By International Monetary Fund

  • White Papers // Nov 2009

    Fiscal Stimulus To The Rescue? Short-Run Benefits And Potential Long-Run Costs Of Fiscal Deficits

    This paper uses the IMF's Global Integrated Monetary and Fiscal Model to compute short-run multipliers of fiscal stimulus measures and long-run crowding-out effects of higher debt. Multipliers of two-year stimulus range from 0.2 to 2.2 depending on the fiscal instrument, the extent of monetary accommodation and the presence of a...

    Provided By International Monetary Fund

  • White Papers // Nov 2009

    Credit Derivatives: Systemic Risks And Policy Options?

    Credit derivative markets are largely unregulated, but calls are increasingly being made for changes to this "Hands off" stance, amidst concerns that they helped to fuel the current financial crisis, or that they could be a cause of the next one. The purpose of this paper is to address two...

    Provided By International Monetary Fund

  • White Papers // Nov 2009

    Adding Indonesia To The Global Projection Model

    This paper estimates a small quarterly Global Projection Model (GPM). The GPM project is designed to improve the toolkit to which economists have access for studying both own-country and cross-country linkages. In this paper, the author adds Indonesia to a previously estimated small quarterly projection model of the US, euro...

    Provided By International Monetary Fund

  • White Papers // Nov 2009

    Macroeconomic Patterns And Monetary Policy In The Run-Up To Asset Price Busts

    This paper finds that inflation, output and the stance of monetary policy do not typically display unusual behavior ahead of asset price busts. By contrast, credit, shares of investment in GDP, current account deficits, and asset prices typically rise, providing useful, if not perfect, leading indicators of asset price busts....

    Provided By International Monetary Fund

  • White Papers // Nov 2009

    Monetary And Macroprudential Policy Rules In A Model With House Price Booms

    The author argues that a stronger emphasis on macrofinancial risk could provide stabilization benefits. Simulations results suggest that strong monetary reactions to accelerator mechanisms that push up credit growth and asset prices could help macroeconomic stability. In addition, using a macroprudential instrument designed specifically to dampen credit market cycles would...

    Provided By International Monetary Fund

  • White Papers // Nov 2009

    The Stock Of Intangible Capital In Canada: Evidence From The Aggregate Value Of Securities

    This paper measures the size of the stock of intangible capital in Canada using newly released data on the market value of all securities in the economy. The approach taken relies on a quantitative application of the q-theory of investment to generate the quantity of capital owned by firms. I...

    Provided By International Monetary Fund

  • White Papers // Nov 2009

    Countering The Cycle - The Effectiveness Of Fiscal Policy In Korea

    The Korean authorities having taken decisive and proactive fiscal measures to help stem the fallout from the current global economic and financial crisis, with the size of the fiscal stimulus well-above the average response of other G20 economies. In this context, a key question is how effective fiscal policy is...

    Provided By International Monetary Fund

  • White Papers // Nov 2009

    Today Versus Tomorrow: The Sensitivity Of The Non-Oil Current Account Balance To Permanent And Current Income

    This paper applies the Permanent Income Model to the non-oil current accounts of the major oil exporters to assess the extent to which national consumption decisions in these countries are made on the basis of permanent versus current income. A test of whether the return on oil wealth and oil...

    Provided By International Monetary Fund

  • White Papers // Nov 2009

    Financial Sector Surveillance And The IMF

    The global financial crisis has magnified the role of Financial Sector Surveillance (FSS) in the Fund's activities. This paper surveys the various steps and initiatives through which the Fund has increasingly deepened its involvement in FSS. Overall, this process can be characterized by a preliminary stage and two main phases....

    Provided By International Monetary Fund

  • White Papers // Nov 2009

    Governance And Fund Management In The Chinese Pension System

    Governance of pension fund management is important as it impacts investment performance and critically determines the success of policies aimed at pre-funding pension liabilities. Internationally accepted standards of governance and fund management have been established by several international organizations and standard setters. These include the International Social Security Association (ISSA),...

    Provided By International Monetary Fund

  • 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 // Sep 2009

    What Drives China's Interbank Market?

    Interest rates in China comprise a mix of both market determined interest rates (interbank rates and bond yields), and regulated interest rates (lending and deposit rates), reflecting China's gradual process of interest rate liberalization. The author argues using a theoretical model and empirical analysis, that the regulation of key retail...

    Provided By International Monetary Fund

  • White Papers // Sep 2009

    Search In The Labor Market Under Imperfectly Insurable Income Risk

    This paper develops a general equilibrium model with unemployment and noncooperative wage determination to analyze the importance of incomplete markets when risk-averse agents are subject to idiosyncratic employment shocks. A version of the model calibrated to the U.S. shows that market incompleteness affects individual behavior and aggregate conditions: it reduces...

    Provided By International Monetary Fund

  • White Papers // Sep 2009

    One Money, One Market - A Revised Benchmark

    The introduction of the euro generated substantial interest in measuring the impact of currency unions (CUs) on trade flows. Rose's (2000) initial estimates suggested a tripling of trade and created a literature in search of "more reasonable" CU effects. A recent meta-analysis of this literature shows that subsequent papers quantify...

    Provided By International Monetary Fund

  • White Papers // Aug 2009

    Euro Area Monetary Policy In Uncharted Waters

    The author analyzes the European Central Bank's (ECB's) response to the global financial crisis. The results suggests that even during the crisis, the core part of ECB's monetary policy transmission - from policy rates to market rates - has continued to operate, but at a decreased efficiency and also find...

    Provided By International Monetary Fund

  • White Papers // Aug 2009

    Establishing Conversion Values For New Currency Unions: Method And Application To The Planned Gulf Cooperation Council (GCC) Currency Union

    A key issue in creating a new currency union is setting the rates to convert national currencies into the new union currency. Planned unions in the Gulf region and Africa are seeking methods to set the conversion rates when their new currencies are created. The author proposes a forward-looking econometric...

    Provided By International Monetary Fund

  • White Papers // Aug 2009

    International Evidence On Recovery From Recessions

    Although negative shocks have persistent effects on output on average, this paper shows that macroeconomic policies and the structure of the economy can influence the speed of recovery and mitigate the persistence of the shock. Indeed, monetary and fiscal stimulus and foreign aid can spur a rebound, with impacts that...

    Provided By International Monetary Fund

  • White Papers // Aug 2009

    Understanding The Growth Of African Financial Markets

    This paper examines empirically the determinants of financial market development in Africa with an emphasis on banking systems and stock markets. The results show that income level, creditor rights protection, financial repression, and political risk are the main determinants of banking sector development in Africa, and that stock market liquidity,...

    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 // Sep 2009

    Benchmark Priors Revisited: On Adaptive Shrinkage And The Supermodel Effect In Bayesian Model Averaging

    Default prior choices fixing Zellner's g are predominant in the Bayesian Model Averaging literature, but tend to concentrate posterior mass on a tiny set of models. The paper demonstrates this supermodel effect and proposes to address it by a hyper-g prior, whose data-dependent shrinkage adapts posterior model distributions to data...

    Provided By International Monetary Fund

  • White Papers // Sep 2009

    French Banks Amid The Global Financial Crisis

    This paper runs the gamut of qualitative and quantitative analyses to examine the performance of French banks during 2006-2008 and the financial support measures taken by the French government. French banks were not immune but proved relatively resilient to the global financial crisis reflecting their business and supervision features. An...

    Provided By International Monetary Fund

  • White Papers // Sep 2009

    The Need For Special Resolution Regimes For Financial Institutions? The Case Of The European Union

    The global financial crisis has demonstrated weaknesses in resolution regimes for financial institutions around the globe, including in the European Union (EU). This paper considers the principles underlying resolution regimes for financial institutions, and draws out how a well-designed resolution regime can expand the toolset available for crisis management. Introducing,...

    Provided By International Monetary Fund

  • White Papers // Sep 2009

    Modernizing Bank Regulation In Support Of Financial Deepening: The Case Of Uruguay

    This paper studies how Uruguay's regulatory framework was gradually strengthened to address shortcomings identified during the 2002 - 03 crisis, to align with international standards and, more recently, to deal with cyclical pressures resulting in an acceleration of bank lending. In particular, regulatory reforms pertaining to loan classification and provisioning...

    Provided By International Monetary Fund

  • White Papers // Sep 2009

    The Real Effects Of Financial Sector Risk

    This paper estimates the magnitude of key effects on the real economy from financial sector stress. The author focuses on the short-run feedback effects from market-based indicators of financial sector risk to the real economy through the credit channel, and estimates this effect on an economy-wide (macro) level, as well...

    Provided By International Monetary Fund

  • White Papers // Sep 2009

    Frugality: Are We Fretting Too Much? Household Saving And Assets In The United States

    Household savings rates in the United States have recently crept up from all-time lows. Some have suggested that a shift toward frugality will hamper GDP growth - the Keynesian "Paradox of thrift." The author estimates that households compensate for a fall in their asset income by saving more out of...

    Provided By International Monetary Fund

  • White Papers // Sep 2009

    The Derivatives Market In South Africa: Lessons For Sub-Saharan African Countries

    This paper examines the role of the derivatives market in South Africa and provides policy options for promoting the development of derivatives markets in sub-Saharan Africa. South Africa's derivatives market has grown rapidly in recent years, supporting capital inflows and helping market participants to price, unbundle and transfer risk. There...

    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 // Sep 2009

    The Effectiveness Of Central Bank Interventions During The First Phase Of The Subprime Crisis

    This paper provides evidence that central bank interventions had a statistically significant impact on easing stress in unsecured interbank markets during the first phase of the subprime crisis which began in July 2007. Extraordinary liquidity provisions, such as the Term Auction Facility by the Federal Reserve, are analyzed. First a...

    Provided By International Monetary Fund

  • White Papers // Sep 2009

    Commodity Terms Of Trade: The History Of Booms And Busts

    The link between commodity prices and macroeconomic performance has been hotly debated in the literature, with some studies finding that commodity booms raise growth while others suggest a "Resource curse" that undercuts sustainable growth.2 Unfortunately, the commodity-price data used in this literature reflect either the aggregate terms of trade, or...

    Provided By International Monetary Fund

  • White Papers // Sep 2009

    How To Stop A Herd Of Running Bears? Market Response To Policy Initiatives During The Global Financial Crisis

    This paper examines the impact of macroeconomic and financial sector policy announcements during the recent crisis on interbank credit and liquidity risk premia. Announcements of interest rate cuts, liquidity support, liability guarantees, and recapitalization were associated with a reduction of interbank risk premia, albeit to a different degree during the...

    Provided By International Monetary Fund

  • White Papers // Sep 2009

    The Drivers Of Housing Cycles In Spain

    Since Spain joined the EMU, two main important factors behind the housing boom appear to be the decrease of nominal interest rates and demographic factors. In this paper the author estimates a New Keynesian model of a currency area, using data for Spain and the rest of the EMU to...

    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 // 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

    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

    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 // 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 // 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 // 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 // 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 // Jan 2011

    How Does Trade Evolve In The Aftermath Of Financial Crises?

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

    Provided By International Monetary Fund