The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and...

Contrary to the arguments of several scholars, we have failed to find either a conclusive theoretical case or clear empirical evidence of an effect, harmful or otherwise, of exchange rate variability (as measured by either short-term volatility or long-run misalignment) on overall levels of...

In discussing the June 2014 paper, Executive Directors broadly supported staff's proposal to introduce more flexibility into the Fund's exceptional access framework to reduce unnecessary costs for the member, its creditors, and the overall system. Directors' views varied on staff's proposal to...

This paper explores how banking sector developments and characteristics influence the propagation of risks from the banking sector to sovereign debt, including how they affect the extent of fiscal costs of banking crises when those occur. It then proposes practices and policies for the fiscal...

This paper considers the problem of allocation of investment for a debtor country that faces a ceiling on the amount of foreign debt it can accumulate. It shows that it is optimal for the debtor country to create a more open economy by favoring investment in the export sector over investment in...

This paper analyzes the economic determinants of developing country creditworthiness indicators for over 60 developing countries for the period from 1980 to 1993. Our results indicate that economic fundamentals--the ratio of non-gold foreign exchange reserves to imports, the ratio of the current...

This paper constructs and analyzes an optimizing model of a highly-indebted small open economy. An important innovation in the model is the incorporation of sovereign risk through the specification of an upward-sloping foreign debt supply function. The model is used to examine the interaction...

This study examines the relative importance of political and economic variables in the determination of a country’s standing in credit ratings provided by commercial rating agencies. It finds that creditworthiness appears to be determined primarily by economic variables. While including...

This paper summarizes the relevant considerations and presents decisions for the establishment of an Investment Account (IA). Executive Directors considered an analysis of the establishment and operations of an IA in September 2005. During the discussion in March 2006 of the medium-term outlook...