This paper analyses the international dimension of fiscal policy using a small open economy framework in which the government finances its spending by levying distortionary taxation and issuing non-state-contingent debt. The main finding of the paper is that, once the open economy aspect of the...

The key findings of the Czech Republic’s 2010 Article IV Consultation are discussed. Large foreign direct investment inflows fostered trade integration, underpinning an export-led expansion. Higher initial standard of living contained consumption convergence pressures. An improved fiscal...

In standard macroeconomic models, debt sustainability and price level determinacy are achieved when fiscal policy avoids explosive debt and monetary policy controls inflation, irrespective of the relative strengths of each policy stance. We examine how these policy requirements for equilibrium...

Jim Tobin, who died on March 11, 2002 at the age of 84, was one of giants of economics of the second half of the twentieth century and the greatest macroeconomist of his generation. Tobin’s influence on macroeconomic theory is so pervasive - so much part of our professional ‘acquis’ - that...

This Selected Issues paper quantifies the macroeconomic effects of fiscal policy in Spain, focusing on the external sector. It describes the stylized facts of the Spanish economy and presents an econometric analysis. It examines Spain’s growth and productivity performance in relation to a...

The sharp rise in household finance, both in debt and in assets, is one of the striking empirical facts about the US economy of the last two decades. But it is still not clear what caused it. Economists, both mainstream and heterodox, seek an explanation in financial market innovation and...

This paper discusses Bosnia and Herzegovina’s Third Review Under the Stand-By Arrangement and Request for Waiver of Applicability of a Performance Criterion. Financial sector indicators through end-March 2013 suggest that the banking system remains profitable and adequately capitalized at...

This 2013 Article IV Consultation highlights that on the back of new policy framework, growth in Japan accelerated sharply in early 2013. First quarter GDP growth rose to 4.1 percent (seasonally adjusted annual rate) after two quarters of stagnation. Rising equity values stimulated consumption,...

This Selected Issues paper analyzes the fiscal strength of the economy of the Czech Republic. Fiscal policy in the Czech Republic has shown a procyclical bias temporarily interrupted during the crisis years. The large stimulus implemented has been more than compensated by a frontloaded...

The first paper is on the oil boom in Azerbaijan, which presents a unique opportunity to speed up the development agenda, but at the same time poses challenges to the management of macroeconomic policy. A new fiscal framework to sustain macroeconomic stability and achieve fiscal sustainability...