International Monetary Fund

Displaying 1-40 of 679 results

  • White Papers // Dec 2011

    Employment Protection and Business Cycles in Emerging Economies

    The authors build a small open economy, real business cycle model with labor market frictions to evaluate the role of employment protection in shaping business cycles in emerging economies. The model features matching frictions and an endogenous selection effect by which inefficient jobs are destroyed in recessions. In a quantitative...

    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 2011

    The Role Of Monetary Policy In Turkey During The Global Financial Crisis

    Turkey is an interesting case study because it was one of the hardest hit emerging economies by the global financial crisis, with a year-over-year contraction of 15 percent during the first quarter of 2009. At the same time, anticipating the fallout from the crisis, the Central Bank of the Republic...

    Provided By International Monetary Fund

  • White Papers // May 2011

    Precautionary Savings And Global Imbalances In World General Equilibrium

    In this paper, the authors assess the implications of precautionary savings for global imbalances by considering a world economy model composed by the US, the Euro Area, Japan, China, oil-exporting countries, and the rest of the world. These areas are assumed to differ only with respect to GDP volatility which...

    Provided By International Monetary Fund

  • White Papers // May 2011

    Sectoral Composition Of Foreign Direct Investment And External Vulnerability In Eastern Europe

    In the run up to the global crisis, countries in Central Eastern and Southeastern Europe attracted large capital inflows and some of them built up large external imbalances. This paper investigates whether these imbalances are linked to the sectoral composition of FDI. It shows that FDI in the tradable sectors...

    Provided By International Monetary Fund

  • White Papers // May 2011

    Did Export Diversification Soften The Impact Of The Global Financial Crisis?

    This paper considers the role of export diversification in determining trade outcomes during the global financial crisis. The impact of export diversification (or concentration) is measured by assessing three different dimensions of specialization. First, concentration by geographic destination is considered; that is, whether the bulk of exports from a country...

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  • White Papers // May 2011

    Impact Of The Global Crisis On Banking Sector Soundness In Asian Low-Income Countries

    The paper takes stock of the impact of the global financial crisis that began in late 2007 on banking sectors of Asian low-income countries, by exploring bank-level data provided by Bankscope. The paper examines three key channels of possible crisis spillovers: exposures to valuation changes of mark-to-market financial assets, a...

    Provided By International Monetary Fund

  • White Papers // Apr 2011

    Toward Inflation Targeting In Sri Lanka

    This paper develops a practical model-based Forecasting and Policy Analysis System (FPAS) to support a transition to an inflation forecast targeting regime in Sri Lanka. The FPAS model provides a relatively good forecast for inflation and a framework to evaluate policy trade-offs. The model simulations suggest that an open-economy inflation...

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  • White Papers // Apr 2011

    Evidence On Productivity, Comparative Advantage, And Networks In The Export Performance Of Firms

    This paper tests the effect of comparative advantage, size, and networking on the firm probability of exporting. The closest theoretical framework is the one of Bernard, Redding, and Schott (2007), with firm heterogeneity across countries and industries. The authors use a recently assembled multi-country multi-industry firm level dataset, and construct...

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  • White Papers // Apr 2011

    ICT, Financial Inclusion, And Growth: Evidence From African Countries

    This paper studies the impact of Information and Communication Technologies (ICT), especially mobile phone rollout, on economic growth in a sample of African countries from 1988 to 2007. Further, the authors investigate whether financial inclusion is one of the channels through which mobile phone development influences economic growth. In estimating...

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  • White Papers // Apr 2011

    Reconsidering The Role Of Food Prices In Inflation

    Food prices are generally excluded from measures of inflation most closely watched by policymakers due either to their transitory nature or their higher volatility. However, in lower income countries, food price inflation is not only more volatile but also on average higher than nonfood inflation. Food inflation is also in...

    Provided By International Monetary Fund

  • White Papers // Mar 2011

    Modeling Inflation In Chad

    This paper examines the determinants of inflation in Chad using quarterly data from 1983:Q1 to 2009:Q3. The analysis is based on a single-equation model, completed by a structural vector auto regression model to capture inflation persistence. The results show that the main determinants of inflation in Chad are rainfall, foreign...

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  • White Papers // Mar 2011

    Fiscal Expectations Under The Stability And Growth Pact: Evidence From Survey Data

    The paper uses survey data to analyze whether financial market expectations on government budget deficits changed in France, Germany, Italy, and the United Kingdom during the period of the Stability and Growth Pact (SGP). The authors' findings indicate that accuracy of financial expert deficit forecasts increased in France. Convergence between...

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  • White Papers // Feb 2011

    Global Shocks And Their Impact On Low-Income Countries: Lessons From The Global Financial Crisis

    This paper investigates the short-run effects of the 2007 - 09 global financial crisis on growth in (mainly non-fuel exporting) Low-Income Countries (LICs). Four conclusions stand out. First, for many individual LICs, 2009 was not extraordinarily calamitous; however, aggregate LIC output declined sharply because LICs were unusually synchronized. Second, the...

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  • White Papers // Feb 2011

    Overborrowing, Financial Crises And 'Macroprudential' Policy

    This paper studies over borrowing, financial crises and macro-prudential policy in an equilibrium model of business cycles and asset prices with collateral constraints. Agents in a decentralized competitive equilibrium do not internalize the negative effects of asset fire-sales on the value of other agents' assets compared with a constrained social...

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  • White Papers // Feb 2011

    New Indicators For Tracking Growth In Real Time

    The authors develop monthly indicators for tracking growth in 32 advanced and emerging-market economies. They test the historical performance of the indicators and find that they do a good job at describing the business cycle. In a recursive out-of-sample forecasting exercise, they find that the indicators generally produce good GDP...

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  • White Papers // Jan 2011

    Government Debt Issuance In The Euro Area: The Impact Of The Financial Crisis

    This paper documents and analyzes crisis-related changes in government debt issuance practices in the 16 euro zone countries and Denmark. Using a newly constructed database on primary market debt issuance during 2007 - 09, the authors find evidence of a shift away from pre-crisis standards of best funding practices -...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Armenia: An Assessment Of The Real Exchange Rate And Competitiveness

    This paper uses a range of different methodologies to estimate the equilibrium real exchange rate in Armenia with both single-country and panel estimation techniques. The authors estimate a country specific autoregressive distributed lag model and then proceed with the estimation of a co-integrated panel consisting of transition economies in Europe...

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  • White Papers // Jan 2011

    Investment Objectives Of Sovereign Wealth Funds-A Shifting Paradigm

    While SWF investment objectives to some extent reflect inherent characteristics, notable differences in Strategic Asset Allocation (SAA) exist even amongst SWFs of similar types. Even so, this paper shows that the global crisis may have changed SWF's asset allocations in ways that may not be ideal or justified in all...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Trade And Trade Finance In The 2008-09 Financial Crisis

    Global merchandise trade sharply declined in late 2008 and early 2009, and some press and financial market reports assigned a large role for the decline to trade finance. However, the available evidence suggests that shocks to trade finance were not the major factor in the decline in trade. Surveys of...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    To Fire Or To Hoard? Explaining Japan's Labor Market Response In The Great Recession

    The Great Recession pushed Japan's unemployment rate to historic highs, but the increase has been small by international standards and small relative to the large output shock. This paper explores Japan's cyclical labor market response to the global financial crisis. These findings suggest that the employment responsiveness has been historically...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Interpreting Currency Movements During The Crisis: What's The Role Of Interest Rate Differentials?

    Using an adaptation of the Uncovered Interest Parity (UIP) condition, this paper analyzes the drivers behind the large, symmetric exchange rate swings observed during the financial crisis of 2008 - 2010. Employing a Nelson-Siegel model, the authors estimate yield curves and decompose the exchange rate movements into changes they attribute...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    The Impact Of Fiscal Consolidation And Structural Reforms On Growth In Japan

    With Japan's public debt reaching historical levels, the need for fiscal consolidation and structural reforms have increased. As fiscal consolidation will require a sustained and large adjustment in the fiscal balance, its growth effect is a concern particularly for the short run. This paper uses the IMF's Global Integrated Monetary...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    How Does Political Instability Affect Economic Growth?

    This paper is to empirically determine the effects of political instability on economic growth. Using the system-GMM estimator for linear dynamic panel data models on a sample covering up to 169 countries, and 5-year periods from 1960 to 2004, the author find that higher degrees of political instability are associated...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    The Spanish Labor Market In A Cross-Country Perspective

    The Spanish labor market is not working: the unemployment rate is structurally very high; wages are not very responsive to labor market conditions, causing a high cyclicality of unemployment; and the labor market is highly dual. Compared with the EU15, Spanish labor market institutions and policies stand out by the...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    What Is Driving Financial De-dollarization In Latin America?

    In the last decade, a group of Latin American countries (Bolivia, Paraguay, Peru, and Uruguay) experienced a gradual, yet sustained decline in financial dollarization. This paper documents the stylized facts and uses a standard VAR approach to examine the drivers of both deposit and credit de-dollarization. It finds that the...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Capital Flows, Exchange Rate Flexibility, And The Real Exchange Rate

    This paper analyzes the impact of capital inflows and exchange rate flexibility on the real exchange rate in developing countries based on panel co-integration techniques. The results show that public and private flows are associated with a real exchange rate appreciation. Among private flows, portfolio investment has the highest appreciation...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    The Effects Of Housing Prices And Monetary Policy In A Currency Union

    The recent boom-and-bust cycle in housing prices has refreshed the debate on the drivers of housing cycles as well as the appropriate policy response. The authors analyze the case of Spain, where housing prices have soared since it joined the EMU. They present evidence based on a VAR model, and...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Monetary Policy Transmission In An Emerging Market Setting

    Some emerging economies have a relatively ineffective monetary policy transmission owing to weaknesses in the domestic financial system and the presence of a large and segmented informal sector. At the same time, small open economies can have a substantial monetary policy transmission through the exchange rate channel. In order to...

    Provided By International Monetary Fund

  • White Papers // Jan 2011

    Asian Financial Integration: Trends And Interruptions

    The paper compares trends in financial integration within Asia with those in industrialized countries and other regional groups. Declines in cross-country dispersion in equity returns and interest rates suggest increased Asian integration, with the process interrupted by crises and global volatility. Cross-border equity and bond holdings have also increased, but...

    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...

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  • White Papers // Jan 2011

    A Barrel Of Oil Or A Bottle Of Wine: How Do Global Growth Dynamics Affect Commodity Prices?

    This paper investigates the causes of extreme fluctuations in commodity prices from 1990 to 2010. Analyzing two very distinct commodities - crude oil and fine wine, the authors find that macroeconomic factors are the main determinants of commodity prices. Although supply constraints have the expected effect, aggregate demand growth is...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    Lessons From The Financial Crisis On Modelling Systemic And Sovereign Risk

    The complex interactions, spillovers and feedbacks of the global crisis that began in 2007 remind us how important it is to improve the authors' analyzes and modelling of financial crises and sovereign risk. This paper provides a broad framework to examine how vulnerabilities can build up and suddenly erupt in...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    Macroeconomic Effects Of Public Pension Reforms

    The paper explores the macroeconomic effects of three public pension reforms, namely an increase in retirement age, a reduction in benefits and an increase in contribution rates. Using a five-region version of the IMF's Global Integrated Monetary and Fiscal model (GIMF), the authors find that public pension reforms can have...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    Learning About Inflation Measures For Interest Rate Rules

    Empirical evidence suggests that goods are highly heterogeneous with respect to the degree of price rigidity. The authors develop a DSGE model featuring heterogeneous nominal rigidities across two sectors to study the equilibrium determinacy and stability under adaptive learning for interest rate rules that respond to inflation measures differing in...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    European Financial Linkages: A New Look At Imbalances

    The authors document external investment positions among European Union countries at the start of the financial crisis through the creation of a new database comprising bilateral external financial asset and liabilities, excluding reserve assets and derivatives. While there are some gaps in the data, the overall coverage of reported bilateral...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    Japan's Quest For Growth: Exploring The Role Of Capital And Innovation

    As labor input in Japan shrinks with population aging, capital accumulation and productivity gains will drive growth over the medium-term. At the same time, a changing global landscape calls for a shift in export-oriented investment toward new markets and a new generation of products, as well as increased investment by...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    Estimating A Structural Model Of Herd Behavior In Financial Markets

    The authors develop a new methodology to estimate the importance of herd behavior in financial markets: They build a structural model of informational herding that can be estimated with financial transaction data. In the model, rational herding arises because of information-event uncertainty. They estimate the model using data on a...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    The Cost Of Private Debt Over The Credit Cycle

    The authors identify global and regional fluctuations in international private debt flows to emerging and developing countries using data on cross border loans and international bond issuance over 1993 - 2009. They estimate the effects of individual borrower characteristics as well as macroeconomic conditions on the cost of foreign borrowing...

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    Into The Great Unknown: Stress Testing With Weak Data

    Stress testing has become the risk management tool du jour in the wake of the global financial crisis. In countries where the information reported by financial institutions is considered to be of sufficiently good quality, and supervisory and regulatory standards are high, stress tests can be of significant value. In...

    Provided By International Monetary Fund

  • White Papers // Nov 2010

    Government Involvement In Corporate Debt Restructuring: Case Studies From The Great Recession

    The paper examines recent episodes of government involvement in corporate debt restructurings. It argues that corporate debt restructuring is an important step toward recovery from a financial crisis. The authors then discuss the rationale for, and modalities of, the state intervention in corporate debt workouts through reviewing six countries with...

    Provided By International Monetary Fund

  • White Papers // Nov 2010

    On The Estimation Of Term Structure Models and An Application To the United States

    This paper discusses the estimation of models of the term structure of interest rates. After reviewing the term structure models, specifically the Nelson-Siegel Model and Affine Term-Structure Model, this paper estimates the terms structure of Treasury bond yields for the United States with pre-crisis data. This paper uses a software...

    Provided By International Monetary Fund

  • White Papers // Nov 2010

    Bilateral Financial Linkages And Global Imbalances: A View On The Eve Of The Financial Crisis

    The authors present a novel and comprehensive dataset of bilateral gross and net external positions in various financial instruments for the main advanced and emerging economies and regions, designed to improve the understanding of cross-border financial linkages. The data show no strong correspondence between country or region pairs with the...

    Provided By International Monetary Fund

  • White Papers // Nov 2010

    Slowdown Of Credit Flows In Jordan In The Wake Of The Global Financial Crisis: Supply Or Demand Driven?

    This paper estimates a disequilibrium model of credit supply and demand to evaluate the relative role of these factors in the slowdown of credit flows in the Jordanian economy in the wake of the global financial crisis. The empirical analysis suggests that the credit stagnation is mainly driven by the...

    Provided By International Monetary Fund

  • White Papers // Nov 2010

    Determinants Of The Foreign Exchange Risk Premium In Gulf Cooperation Council Countries

    This paper analyzes macroeconomic determinants of the foreign exchange risk premium in two Gulf Cooperation Council (GCC) countries that peg their currencies to the U.S. dollar: Saudi Arabia and the United Arab Emirates. The analysis is based on the stochastic discount factor methodology, which imposes a no arbitrage condition on...

    Provided By International Monetary Fund

  • White Papers // Nov 2010

    Should Advanced Countries Adopt A Fiscal Responsibility Law?

    Fiscal Responsibility Laws (FRLs) appear to be more popular in middle-income countries than advanced countries, even though their success is limited. The reasons why few advanced countries have a FRL include: the existing legal framework for the budget system is adequate; supranational rules and political agreements in EU countries; failed...

    Provided By International Monetary Fund

  • White Papers // Mar 2009

    A Primer On Fiscal Analysis In Oil-Producing Countries

    This paper proposes an integrated approach to fiscal policy analysis in oil producing countries (OPCs) geared towards addressing their unique and complex policy challenges. First, an accurate assessment of the fiscal stance in OPCs can be obscured by large and volatile oil revenue flows. Second, uncertain and volatile oil revenue...

    Provided By International Monetary Fund

  • White Papers // Mar 2009

    Developing A Structured Forecasting And Policy Analysis System To Support Inflation-Forecast Targeting (IFT)

    This paper presents a basic plan for developing a Forecast and Policy Analysis System designed to support an inflation-forecast targeting regime at a central bank. It includes discussion of the development of data management and reporting processes; the creation of a forecast team and the development of human capital; the...

    Provided By International Monetary Fund

  • White Papers // Mar 2009

    Foreign Banks In The CESE Countries: In For A Penny, In For A Pound?

    The aim of this paper is to construct a comprehensive and consistent dataset to analyze the potential risks from foreign bank lending, for both the creditor and borrower countries of Central, Eastern and South-Eastern Europe (CESE). The author develops a picture of bank claims on 13 CESE countries by combining...

    Provided By International Monetary Fund

  • White Papers // Mar 2009

    Credit Market In Morocco: A Disequilibrium Approach

    In this paper the author uses a disequilibrium framework common in the "Credit crunch" literature, first to examine whether the slow credit growth in Morocco during the rapid expansion of liquidity in the first half of the decade can be attributed to credit rationing, and second to investigate the role...

    Provided By International Monetary Fund

  • White Papers // Mar 2009

    Global Liquidity, Risk Premiums And Growth Opportunities

    This paper constructs new indicators of liquidity for equity, bond and money markets in major advanced and emerging market countries, documents their evolution and co-movements, and assesses the extent to which such measures are determinants of selected spreads and proxy measures of countries' growth opportunities. There is evidence of an...

    Provided By International Monetary Fund

  • White Papers // Mar 2009

    Forces Driving Inflation In The New EU10 Members

    This paper analyzes the forces driving inflation in the new EU10 member countries. A significant part of headline inflation in these countries is due to common factors, such as price level convergence and EU integration. However, idiosyncratic factors have also played a role in the inflation process. These factors are...

    Provided By International Monetary Fund

  • White Papers // Mar 2009

    Fiscal And Monetary Policy During Downturns: Evidence From The G7

    This paper analyzes how fiscal and monetary policy typically responds during downturns in G7 countries. It evaluates whether discretionary fiscal responses to downturns are timely and temporary, and compares the response of fiscal policy to that of monetary policy. The results suggest that while responding more weakly and less quickly...

    Provided By International Monetary Fund

  • White Papers // Mar 2009

    In Search Of A Dramatic Equilibrium: Was The Armenian Dram Overvalued?

    Armenia's real effective exchange rate has appreciated rapidly in recent years, which has led to concerns about a possible overvaluation of the dram. During 2005-2007, real appreciation was accompanied by nominal appreciation, and was mostly the result of large foreign exchange inflows, notably remittances and FDI, as well as high...

    Provided By International Monetary Fund

  • White Papers // Mar 2009

    International Currency Portfolios

    This paper develops a theory of international currency portfolios that holds in general equilibrium, and that is therefore not subject to the criticisms directed at the portfolio balance literature of the 1980s. It shows that, under plausible assumptions about fiscal policy, the relationship between the rates of return of different...

    Provided By International Monetary Fund

  • White Papers // Mar 2009

    The Italian Labor Market: Recent Trends, Institutions, And Reform Options

    Despite improvements in labor market performance over the past decade, owing in part to past reforms, Italy's employment and productivity outcomes continue to lag behind those of its European peers. This paper reviews Italy's institutional landscape and labor market trends from a cross-country perspective, and discusses possible avenues for further...

    Provided By International Monetary Fund

  • White Papers // Mar 2009

    Sovereign Default, Private Sector Creditors And The IFIs

    This paper builds a model of a sovereign borrower that has access to credit from private sector creditors and an IFI. Private sector creditors and the IFI offer different debt contracts that are modelled based on the institutional frameworks of these two types of debt. The author analyzes the decisions...

    Provided By International Monetary Fund

  • White Papers // Mar 2009

    Competition In The Financial Sector: Overview Of Competition Policies

    As in other sectors, competition in finance matters for allocative, productive and dynamic efficiency. Theory suggests, however, that unfettered competition is not first best given the special features of finance. The author reviews these analytics and describes how to assess the degree of competition in markets for financial services. Existing...

    Provided By International Monetary Fund

  • White Papers // Mar 2009

    Exchange Rates And Wages In An Integrated World

    This paper analyzes how the pass-through from exchange rate to domestic wages depends on the degree of integration between domestic and foreign labor markets. Using data from 66 countries over the period 1981 - 2005, it's found that the elasticity of domestic wages to real exchange rate is 0.1 after...

    Provided By International Monetary Fund

  • White Papers // Mar 2009

    The Second Transition: Eastern Europe In Perspective

    The countries of Eastern Europe achieved two remarkable transitions in the short period of the last two decades: from plan to market and, then, in the run-up to and entry into the European Union, they rode a wave of global trade and financial market integration. Focusing on the second transition,...

    Provided By International Monetary Fund

  • White Papers // Mar 2009

    Deleveraging After Lehman-Evidence From Reduced Rehypothecation

    Rehypothecation is the practice that allows collateral posted by, say, a hedge fund to their prime broker to be used again as collateral by that prime broker for its own funding. In the United Kingdom, such use of a customer's assets by a prime broker can be for an unlimited...

    Provided By International Monetary Fund

  • White Papers // Mar 2009

    Commodity Price Volatility, Cyclical Fluctuations, And Convergence: What Is Ahead For Inflation In Emerging Europe?

    This paper assesses the role of international commodity prices, cyclical fluctuations, and convergence in driving inflation in 18 European emerging economies. Country specific VARs and panel estimates indicate that international commodity price shocks have a significant impact on domestic inflation, but the inflation response is asymmetric for positive and negative...

    Provided By International Monetary Fund

  • White Papers // Mar 2009

    Capital Inflows: Macroeconomic Implications And Policy Responses

    This paper examines the macroeconomic implications of, and policy responses to surges in private capital inflows across a large group of emerging and advanced economies. In particular, the author identifies 109 episodes of large net private capital inflows to 52 countries over 1987 - 2007. Episodes of large capital inflows...

    Provided By International Monetary Fund

  • White Papers // Mar 2009

    Procyclicality And Fair Value Accounting

    In light of the uncertainties about valuation highlighted by the 2007 - 2008 market turbulence, this paper provides an empirical examination of the potential procyclicality that fair value accounting (FVA) could introduce in bank balance sheets. The paper finds that, while weaknesses in the FVA methodology may introduce unintended procyclicality,...

    Provided By International Monetary Fund

  • White Papers // Mar 2009

    Can The Eastern Caribbean Currency Union Afford To Grow Old?

    The demographic transition in the Eastern Caribbean Currency Union (ECCU) now underway is rapid compared with international experience, and emigration is playing a particularly large role. This paper describes and quantifies several factors which could magnify the challenge of pension reform. First, for some ECCU countries, continued emigration at historical...

    Provided By International Monetary Fund

  • White Papers // Mar 2009

    Dedollarization In Liberia-Lessons From Cross-Country Experience

    Liberia's experience with a dual currency regime, with the U.S. dollar enjoying legal tender status, dates to its founding as a sovereign country in 1847. Following the end of the most recent episode of civil war in late-2003, the new government has expressed interest in strengthening the role of the...

    Provided By International Monetary Fund

  • White Papers // May 2011

    Precautionary Savings And Global Imbalances In World General Equilibrium

    In this paper, the authors assess the implications of precautionary savings for global imbalances by considering a world economy model composed by the US, the Euro Area, Japan, China, oil-exporting countries, and the rest of the world. These areas are assumed to differ only with respect to GDP volatility which...

    Provided By International Monetary Fund

  • White Papers // May 2011

    Sectoral Composition Of Foreign Direct Investment And External Vulnerability In Eastern Europe

    In the run up to the global crisis, countries in Central Eastern and Southeastern Europe attracted large capital inflows and some of them built up large external imbalances. This paper investigates whether these imbalances are linked to the sectoral composition of FDI. It shows that FDI in the tradable sectors...

    Provided By International Monetary Fund

  • White Papers // Nov 2010

    Lifting Euro Area Growth: Priorities For Structural Reforms And Governance

    To live up to its growth potential and secure its inclusive social model, the euro area must make better use of its available labor. In the aftermath of the crisis, boosting growth is essential to prevent unemployment from becoming a long-term problem and to facilitate the return to fiscal sustainability....

    Provided By International Monetary Fund

  • White Papers // Dec 2010

    Lessons From The Financial Crisis On Modelling Systemic And Sovereign Risk

    The complex interactions, spillovers and feedbacks of the global crisis that began in 2007 remind us how important it is to improve the authors' analyzes and modelling of financial crises and sovereign risk. This paper provides a broad framework to examine how vulnerabilities can build up and suddenly erupt in...

    Provided By International Monetary Fund

  • White Papers // Dec 2008

    Improving The Investment Performance Of Public Pension Funds: Lessons For The Social Insurance Fund Of Cyprus From The Experience Of Four OECD Countries

    Public pension funds have the potential to benefit from low operating costs because they enjoy economies of scale and avoid large marketing costs. But this important advantage has in most countries been dissipated by poor investment performance. The latter has been attributed to a weak governance structure, lack of independence...

    Provided By International Monetary Fund

  • White Papers // Oct 2009

    Optimal Policy With Occasionally Binding Credit Constraints

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

    Provided By International Monetary Fund

  • White Papers // 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 // Oct 2008

    The Spending And Absorption Of Aid In PRGF Supported Programs

    This paper studies the spending and absorption of aid in PRGF-supported programs, verifies whether the use aid is programmed to be smoothed over time, and analyzes how considerations about macroeconomic stability influence the programmed use of aid. It finds that PRGF-supported programs allow countries to use most or almost all...

    Provided By International Monetary Fund

  • White Papers // Oct 2008

    A Theory Of International Crisis Lending And IMF Conditionality

    The authors present a framework that clarifies the financial role of the IMF, the rationale for conditionality, and the conditions under which IMF-induced moral hazard can arise. In the model, traditional conditionality commits country authorities to undertake crisis resolution efforts, facilitating the return of private capital, and ensuring repayment to...

    Provided By International Monetary Fund

  • White Papers // Oct 2008

    Growing Apart? A Tale Of Two Republics: Estonia And Georgia

    The authors compare and contrast the economic growth performance of Estonia and Georgia since the collapse of the Soviet Union in 1991 in an attempt to understand better the extent to which the growth differential between the two countries can be traced to increased efficiency in the use of capital...

    Provided By International Monetary Fund

  • White Papers // Oct 2008

    Garbage In, Gospel Out? Controlling For The Underreporting Of Remittances

    The world-wide flow of remittances has grown tremendously in recent years, becoming the second source of development finance after foreign direct investment (World Bank, 2005). At the macroeconomic level, the magnitudes of these flows suggest the beneficial nature of remittances for developing nations, despite the challenges of managing such transfers....

    Provided By International Monetary Fund

  • White Papers // Sep 2008

    Determinants Of Government Efficiency

    The authors compile the first large cross-country panel dataset of public sector performance and efficiency, encompassing 114 countries on all income levels from 1980 to 2006, with about 1,800 country-year observations for the education sector and about 900 observations for health. The authors regresses these indicators on potential economic, institutional,...

    Provided By International Monetary Fund

  • White Papers // Sep 2008

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

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

    Provided By International Monetary Fund

  • White Papers // Sep 2008

    Macroeconomic Effects Of EU Transfers In New Member States

    Large inflows from the European Union to the New Member States are likely to significantly impact macroeconomic outcomes. In this paper, the authors use the IMF's Global Integrated Monetary and Fiscal model (GIMF) to analyze the impact of the transfers and show the conditions under which they would help speed...

    Provided By International Monetary Fund