The optimal provision of loan guarantees or deposit insurance is examined in the context of an overlapping generations model. It is demonstrated that even in the face of a market imperfection that precludes diversification of the private sector’s loan portfolio to eliminate risk, full...

The paper considers gains from international economic policy coordination when there is uncertainty concerning the functioning of the world economy, but also learning about the “true” model on the part of policymakers. The paper reports estimates of plausible alternative versions of a...

This paper reviews economic developments in the United States during 1992–96. The paper briefly describes improvements in the national income and product accounts (NIPA) and some of their implications for the analysis of long-term trends in U.S. investment and saving. The paper highlights that...

This Selected Issues paper on the United States analyzes the measures of potential output, natural rate of unemployment, and capacity utilization. Traditionally, measures of resource utilization have been used as indicators for the potential build-up of inflation pressures, and hence as guides...

This Selected Issues paper on the United States analyzes problems in the measurement of output and prices. The paper examines income versus expenditure measures of national output. Sources of consumer price index and findings of the Boskin Commission are discussed, and mismeasurement of output...

This 1999 Article IV Consultation highlights that the U.S. real GDP grew by 3.9 percent in 1998, reflecting buoyant consumption and investment spending. In the first quarter of 1999, real GDP grew by 4.3 percent (annual rate) before slowing to 2.3 percent in the second quarter. Consumption has...

This Selected Issues paper on the United States explains the behavior of inflation and unemployment during 1997–98. The paper highlights that a simple Philips curve equation relating inflation to the unemployment gap has overpredicted inflation since 1993. The mean forecast error for 1994–97...