This paper seeks to draw lessons from the IMF’s experience in handling financial crises around the globe over the past ten years that are relevant to the challenges faced by countries in Latin America, especially in the wake of the recent crisis in Argentina. Experience suggests that...

This paper recounts Chile’s experience with capital account policies since the 1990s. We present how two external shocks were confronted under very different macroeconomic and capital account frameworks. We show that during the 1997-98 Asian-LTCM-Russia crisis, a closed capital account and...

This paper examines the financial stability implications arising from securitization markets, with one eye on the past and another on the future. The paper begins by deriving a number of “lessons learned†based on an examination of key industry developments in the years before the...

Despite enduring one of the sharpest contractions in the EU, Estonia has been successful in its all-out efforts to join the euro area. Core prices have also begun increasing but at a moderate rate. Recent wage increases have defied not only high unemployment but also increases in vacancies and...

This paper examines the impact of the recent global crisis on emerging market economies (EMs). Our cross-country analysis shows that the impact of the crisis was more pronounced in those EMs that had initial weaker fundamentals and greater financial and trade linkages. This effect is observed...

We construct a financial vulnerability indicator that is consistent with the theoretical literature on determinants of defaults. It is based on the amount of new foreign financing that is needed to avoid a default or an import adjustment, expressed as a proportion of the country's sources of...

This paper contains an empirical investigation of the set of economic and political conditions that are associated with a likely occurrence of a sovereign debt crisis. We use a new statistical approach (Binary Recursive Tree) that allows us to derive a collection of "rules of thumb" that help...

We develop an early-warning model of sovereign debt crises. A country is defined to be in a debt crisis if it is classified as being in default by Standard & Poor's, or if it has access to nonconcessional IMF financing in excess of 100 percent of quota. By means of logit and binary recursive...

This paper presents an overview of recent U.S. fiscal developments and discusses possible implications of the sharp turn around in the government’s fiscal position. Against this back ground, it also reviews key policy challenges that will need to be addressed to cope with the mounting...

This paper examines Turkey’s 2004 Article IV Consultation and Eighth Review Under the Stand-By Arrangement and Request for Waiver of Nonobservance of Performance Criterion. Economic performance over the last three years has been impressive. For the medium term, the main challenge is to...