The paper analyzes how the next financial crisis can be prevented and which role the IMF should play. The paper distinguishes between the improvement of existing instruments and solving the moral hazard problem. Both issues are interrelated. The size of operation of the IMF creates a moral...

This paper discusses, in a very general way, a system of IMF insurance against sovereign default that could be offered to private lenders and banking groups. The system could overcome many of the current issues that plague the international private lending market, such as moral hazard on the...

The purpose of this study is to develop an efficient strategy for managing fixed-income portfolios in crisis periods. We use the volatility ratio model of Briere and Szafarz (2008) and the Expected Tail Loss (ETL) approach of Litzenberger and Modest (2008). Our methodology is applied to U.S. and...

It is conventionally held that countries are worse off by forming a monetary union when it comes to macroeconomic stabilization. However, this conventional view relies on assuming that monetary policy is conducted optimally. Relaxing the assumption of optimal monetary policy not only uncovers...

This paper aims to assess the relationship among fiscal variables (net lending, government expenditure and revenue) and economic growth in Sub-Saharan African countries. Using yearly data for the period between 1980 and 2011 in 15 ECOWAS countries, a weak long-run relationship between government...

The paper surveys the literature on the effects of finance on productivity growth. In both the theoretical and empirical literature, there is no consensus regarding the contribution of financial liberalization and financial development to growth. Focusing on the direct channels of growth, the...

The paper shows that an IMF-like coinsurance arrangement among countries can play a useful role in the global financial system. The operation of the coinsurance arrangement is examined under different loan contracts. It shows that, if the IMF´s objective is to safeguard its resources and be...

In this paper we study the effect of the single currency across industries for euro area members. This analysis may help to shed light on the main factors influencing the euro effect on trade flows. We intend to verify whether these factors are specific to individual sectors and/or countries or...

This paper develops a model of the circumstances under which it is beneficial to participate in a currency area. The proposed two-country monetary model of trade with nominal rigidities encompasses the real and monetary arguments suggested by the optimum currency area literature: correlation of...

Capital flight has characterized the transformation process in Russia. Inflows of foreign direct investment have been minor and have been preceeded by inflows of portfolio capital. The paper shows that uncertainty about macroeconomic stabilization exhibits a strong negative effect on the volume...