This paper focuses on principles and various aspects of debt reduction and economic activity. The paper analyzes the effect of debt and debt-service reduction on the contractual and market values of a country's debt and also describes the IMF staff's preliminary attempts to describe and quantify...

The coronavirus crisis has stiffened debt and development-related headwinds that had become strong even before 2020. Sustaining development while maintaining debt sustainability has been made harder by the protracted effects of the pandemic on public finances, earnings and employment, and human...

This paper shows that the presence of quotas on imported inputs that are based on installed capacity can lead to capacity underutilization in manufacturing industries of developing countries. A replacement of such quotas, by tariffs leads to full capacity utilization under assumptions of both...

The paper explores the relationship between trade policy and current accounts. The effect on the current account of a change in protection at home and then abroad is analyzed, assuming that the exchange rate floats. The “savings-and-investment approach” is used. It shows that there is no...

This paper uses a simple model to analyze the forces that determine the size of the public sector and the quality of workers employed in that sector. Workers are heterogeneous, and the public sector chooses an employment strategy that maximizes a social welfare function U(s, Y) that depends on...

In recent years, the appropriate level and structure of interest tates have come to be seen as major issues in connection with stabilization programs undertaken by members. These issues arise from consideration both on the demand side, as interest rates affect the magnitude of aggregate demand,...

This paper was originally prepared for a seminar of the Executive Board of the Fund. In the seminar, Executive Directors expressed a broad range of views with regard to both the adequacy of the Fund's approach to financial programming and the validity of the analysis presented in this paper

The paper examines empirically the question of whether more unequal societies spend more on income redistribution than their more egalitarian counterparts. Theoretical arguments on this issue are inconclusive. The political economy literature suggests that redistributive spending is higher in...

The aim of the paper is to shift the focus of famine analysis away from food supply towards the macroeconomic determinants of food entitlement—i.e., to the ability of individuals to purchase food. Towards this end, we develop a model to demonstrate how loose monetary and fiscal policies may...

This paper develops a model merging the monetary approach to the balance of payments and a neoclassical growth model into a unified framework in which inflation, growth, and the balance of payments are simultaneously determined. The empirical part of the paper presents estimates of the key...