International Monetary Fund

Displaying 321-360 of 603 results

  • 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

    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 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 // 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 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 // 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 // Nov 2009

    Estimating Demand For IMF Financing By Low-Income Countries In Response To Shocks

    This paper estimates factors affecting demand for Fund financing by Low-Income Countries (LICs) in response to policy and exogenous shocks. Various economic variables, including reserve coverage, current account balance to GDP, real GDP growth, macroeconomic stability, and terms of trade shocks are found to be significant determinants of Fund financing....

    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 // Jun 2011

    The Cost Of Volatile Investment In An Emerging Economy

    The author measures the welfare gains from eliminating fluctuations in investment in an emerging economy such as Argentina. The estimated welfare effects are an order of magnitude higher than those for the US and arise with moderate degrees of diminishing returns to investment. This paper calculates the welfare costs associated...

    Provided By International Monetary Fund

  • White Papers // Jun 2009

    Canadian Residential Mortgage Markets: Boring But Effective?

    Canada's financial system has often been criticized for being "too conservative" or "not dynamic enough." Indeed, when compared to the United States, Canadian banks seem to offer fewer loan options, in particular in the mortgage area. This could mean that households are underserved and that there is wide room for...

    Provided By International Monetary Fund

  • White Papers // Jun 2009

    The Systemic Regulation Of Credit Rating Agencies And Rated Markets

    Credit ratings have contributed to the current financial crisis. Proposals to regulate credit rating agencies focus on micro-prudential issues and aim at reducing conflicts of interest and increasing transparency and competition. In contrast, this paper argues that macro-prudential regulation is necessary to address the systemic risk inherent to ratings. This...

    Provided By International Monetary Fund

  • White Papers // Jun 2009

    External Debt Sustainability In HIPC Completion Point Countries: An Update

    Despite substantial debt relief to HIPC Initiative completion point countries, long-term debt sustainability remains a challenge. This paper examines a number of structural factors affecting external debt sustainability. It shows that in HIPC completion point countries (i) the export base broadly remains narrow; (ii) fiscal revenue mobilization lags behind in...

    Provided By International Monetary Fund

  • White Papers // Jun 2009

    Current Accounts In A Currency Union

    A fear about EMU was that in the absence of national currencies, country-specific shocks would result in greater current account divergences between member states. This paper finds that divergences across euro-area countries are smaller and have not risen relative to those across 13 other advanced economies with more flexible exchange...

    Provided By International Monetary Fund

  • White Papers // Jun 2009

    Fiscal Policy Rules For Oil-Producing Countries: A Welfare-Based Assessment

    This paper presents numerical simulations of various fiscal rules for oil-producing countries. Welfare implications are sensitive to the choice of the social welfare function, initial conditions, and non-oil growth prospects. The distribution of non-oil wealth is important for countries with relatively low oil reserves. Corrections for adjustment costs and uncertainty...

    Provided By International Monetary Fund

  • White Papers // Jun 2009

    Decoupling From The East Toward The West? Analyses Of Spillovers To The Baltic Countries

    This paper uses VAR models to examine the magnitude and sources of growth spillovers to the Baltics from key trading partners, as well as from the real effective exchange rate (REER). The results show there are significant cross-country spillovers to the Baltics with those from the EU outweighing spillovers from...

    Provided By International Monetary Fund

  • White Papers // Jun 2009

    Fiscal Incentive Effects Of The German Equalization System

    Does reliance on transfers weaken fiscal discipline and encourage pro-cyclical fiscal policies in recipient subnational governments? Using fiscal reaction functions for a panel of the German L?nder, this paper finds a positive answer to both questions. Net-recipient states (L?nder, benefiting from the transfer system) have not reduced primary expenditure significantly...

    Provided By International Monetary Fund

  • White Papers // Jun 2009

    Modeling With Macro-Financial Linkages: Credit And Policy Shocks In Emerging Markets

    This paper develops a stylized, small, open economy macro model that incorporates an explicit and non-trivial role for financial intermediation. It illustrates how such a model could be used for policy analysis in an emerging market economy where policymakers are concerned about risks associated with rapid credit growth, financial dollarization,...

    Provided By International Monetary Fund

  • White Papers // Jun 2009

    Where Does The Public Sector End And The Private Sector Begin?

    The boundary between the public and private sectors can be defined on the basis of ownership of institutional units. Nonmarket government-owned entities and corporations that are owned or controlled by government units belong to the public sector. "Economic ownership" is more important than majority ownership. Joint ventures, public-private partnerships, and...

    Provided By International Monetary Fund

  • White Papers // Jun 2009

    Competitiveness In Central-Europe: What Has Happened Since EU Accession?

    Since EU accession, trade flows have exhibited strong dynamics in Central-Eastern Europe (CEE). During the period leading to the current global turmoil, the region has also experienced continuous exchange rate appreciation and rapid FDI inflows, both likely to have affected these countries' competitiveness. This paper describes how the determinants of...

    Provided By International Monetary Fund

  • White Papers // May 2009

    The Federal Reserve System Balance Sheet-What Happened And Why It Matters

    The recent expansion of the balance sheet of the consolidated Federal Reserve Banks (FRB) is analyzed in an historical context. The analysis reveals that the nature of Fed involvement in U.S. financial markets has changed dramatically and its expansion is several orders of magnitude beyond what is usually reported. The...

    Provided By International Monetary Fund

  • White Papers // May 2009

    A Multi-Industry Model Of Growth With Financing Constraints

    This paper develops a multi-industry growth model in which firms require external funds to conduct productivity-enhancing R&D. The cost of research is industry-specific. The tightness of financing constraints depends on the level of financial development and on industry characteristics. Over time, a financially constrained economy may converge to the growth...

    Provided By International Monetary Fund

  • White Papers // May 2009

    Development Aid And Economic Growth: A Positive Long-Run Relation

    This paper analyzes the growth impact of official development assistance to developing countries. The approach is different from that of previous studies in two major ways. First, the author disentangles the effects of two kinds of aid: developmental and non-developmental. Second, the specifications allow for the effect of aid on...

    Provided By International Monetary Fund

  • White Papers // May 2009

    Macroeconomic Responses To Terms-Of-Trade Shocks: A Framework For Policy Analysis For The Argentine Economy

    This paper presents a version of the global integrated monetary fiscal (GIMF) model adapted and calibrated to the Argentine economy. The model replicates the effect of the strong improvement in Argentina's terms of trade stemming from higher world commodity prices as well as other key economic trends in Argentina during...

    Provided By International Monetary Fund

  • White Papers // May 2009

    Out Of The Box Thoughts About The International Financial Architecture

    The Global Credit Crisis of 2008 - 09 has underscored the urgency of reforming the international financial architecture. While a number of short-term reforms are already in train, this paper contemplates more ambitious reforms of the international financial architecture that might be implemented over the next ten years. It proposes...

    Provided By International Monetary Fund

  • White Papers // May 2009

    The Macroeconomics Of Scaling Up Aid: The Gleneagles Initiative For Benin

    This paper assesses the macroeconomic implications of scaling up aid for Benin in line with the Gleneagles commitment to double aid to poor countries over the next three years to reach $85 per capita by 2010 and keep it at that level thereafter. The analysis suggests that the additional aid...

    Provided By International Monetary Fund

  • White Papers // May 2009

    Sub-Saharan Africa's Integration In The Global Financial Markets

    The paper uses a unique database covering 44 countries in sub-Saharan Africa (SSA) countries between 2000 and 2007 to study the determinants of the allocation and composition of flows across countries, as well as channels through which private capital flows could affect growth. In the sample, the degree of financial...

    Provided By International Monetary Fund

  • White Papers // May 2009

    Financial Deepening In The CFA Franc Zone: The Role Of Institutions

    During the 1980s and early 1990s many Sub-Saharan African (SSA) countries undertook reforms to promote financial sector deepening. Nevertheless, financial sectors in SSA countries remain among the shallowest in the world and, within Sub-Saharan Africa, financial depth in the CFA franc zone is even more limited. This paper sets out...

    Provided By International Monetary Fund

  • White Papers // May 2009

    An Alternative Explanation For The Resource Curse: The Income Effect Channel

    The paper provides an alternative explanation for the "Resource curse" based on the income effect resulting from high government current spending in resource rich economies. Using a simple life cycle framework, the author shows that private investment in the non-resource sector is adversely affected if private agents expect extra government...

    Provided By International Monetary Fund

  • White Papers // May 2009

    Spillovers To Emerging Equity Markets: An Econometric Assessment

    After more than a year of relatively small spillovers from the financial turmoil in advanced economies, equity prices in emerging markets (EM) succumbed to the dramatic worsening of financial distress in mid-September 2008. Still, in spring 2009, despite their steep and abrupt declines, emerging equity prices as a group were...

    Provided By International Monetary Fund

  • White Papers // May 2009

    Credit Risk Spreads In Local And Foreign Currencies

    The paper shows how - in a Merton-type model with bankruptcy - the currency composition of debt changes the risk profile of a company raising a given amount of financing, and thus affects the cost of debt. Foreign currency borrowing is cheaper when the exchange rate is positively correlated with...

    Provided By International Monetary Fund

  • White Papers // May 2009

    Estimating Default Frequencies And Macrofinancial Linkages In The Mexican Banking Sector

    The credit risk measures the author develops in this paper are used to investigate macrofinancial linkages in the Mexican banking system. Domestic and external macro-financial variables are found to be closely associated with banking soundness. At the aggregate level, high external volatility and domestic interest rates are associated with higher...

    Provided By International Monetary Fund

  • White Papers // May 2009

    From Bear Stearns To Anglo Irish: How Eurozone Sovereign Spreads Related To Financial Sector Vulnerability

    This paper attempts to explain the recent rise and differentiation of sovereign spreads across the countries of the eurozone. Following the onset of the subprime crisis in July 2007, spreads rose but mainly on account of common global factors. The rescue of Bear Stearns in March 2008 marked a turning...

    Provided By International Monetary Fund

  • White Papers // May 2009

    Madagascar: A Competitiveness And Exchange Rate Assessment

    This paper assesses Madagascar's competitiveness in recent years, using both price and nonprice indicators and an exchange rate assessment of the currency and also estimates the distance between the equilibrium and the actual real exchange rates using three methods: the macroeconomic balance approach, the external sustainability approach, and the reduced-form...

    Provided By International Monetary Fund

  • White Papers // Apr 2009

    Fiscal Stimulus With Spending Reversals

    The impact of fiscal stimulus depends not only on short-term tax and spending policies, but also on expectations about offsetting measures in the future. This paper analyzes the effects of an increase in government spending under a plausible debt-stabilizing policy that links current stimulus to a subsequent period of spending...

    Provided By International Monetary Fund

  • White Papers // May 2009

    Financial Intermediation, Competition, And Risk: A General Equilibrium Exposition

    This paper studies a simple general equilibrium model in which investment in a risky technology is subject to moral hazard and banks can extract market power rents. The author shows that more bank competition results in lower economy-wide risk, lower bank capital ratios, more efficient production plans and Pareto-ranked real...

    Provided By International Monetary Fund

  • White Papers // May 2009

    Financial Spillovers To Emerging Markets During The Global Financial Crisis

    In this paper potential financial linkages between liquidity and bank solvency measures in advanced economies and emerging market (EM) bond and stock markets are analyzed during the latest crisis. A multivariate GARCH model is estimated in order to gauge the extent of co-movements of these financial variables across markets. The...

    Provided By International Monetary Fund

  • White Papers // May 2009

    The Persistence Of Capital Account Crises

    This paper contributes to the literature on capital account crises in two ways. First, the analysis of crisis episodes between 1994 and 2002 establishes a clear relationship between the persistence of crises, their complexity, and the intensity of movement of key macroeconomic variables. Second, the author provides a systematic examination...

    Provided By International Monetary Fund

  • White Papers // May 2009

    Advanced Public Financial Management Reforms In South East Europe

    This paper aims to clarify possible systemic bottlenecks to the introduction of advanced PFM reforms in the SEE countries. It relates key fiscal developments to PFM reform processes over the last 15 years. PFM reform strategies must be realistic, with clear objectives and timetables, and with strong country ownership. Among...

    Provided By International Monetary Fund

  • White Papers // May 2009

    What Should Inflation Targeting Countries Do When Oil Prices Rise And Drop Fast?

    After a long period of global price stability, in 2008 inflation increased sharply following unprecedented increases in the price of oil and other commodities, notably food. Although inflation remained lower and growth higher in inflation targeting countries than elsewhere, almost everywhere price stability seemed in jeopardy as consumer prices kept...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

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

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

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Financial Liberalization, Structural Change, And Real Exchange Rate Appreciations

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

    Provided By International Monetary Fund

  • White Papers // Mar 2010

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

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

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Oman: Banking Sector Resilience

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

    Provided By International Monetary Fund

  • White Papers // Mar 2010

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

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

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Caribbean Bananas: The Macroeconomic Impact Of Trade Preference Erosion

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

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    The Real Exchange Rate And Growth Revisited: The Washington Consensus Strikes Back?

    There is good reason and much evidence to suggest that the real exchange rate matters for economic growth, but why? The "Washington Consensus" (WC) view holds that real exchange rate misalignment implies macroeconomic imbalances that are themselves bad for growth. In contrast, Rodrik (2008) argues that undervaluation relative to purchasing...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Asset Booms And Structural Fiscal Positions: The Case Of Ireland

    Asset booms and sectoral changes can distort traditional estimates of structural fiscal revenue, and could lead to serious fiscal policy errors. This paper extends the estimation of structural revenues to take account of asset prices and sectoral changes, and applies this to the case of Ireland, where a property bust...

    Provided By International Monetary Fund

  • White Papers // Mar 2010

    Structural Models In Real Time

    Informed monitoring, using judgment, can outperform short-term forecasts of structural models. And since announcements, special factors and the uncertain timing of some events-for example, the bursting of an evident market bubble - have important sporadic effects, there will always be a role for judgment in forecasting. A common practice at...

    Provided By International Monetary Fund