This paper extends the basic monetary model that underlies the monetary approach to the balance of payments to allow for the endogenous determination of the short-run growth rate of the economy. In the extended model domestic credit expansion affects not only the balance of payments but also the...

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...

This paper presents a cash-in-advance framework, with variable income velocity, where the domestic effects, as well as the international transmission, of financial innovation can be analyzed. In particular, the discussion emphasizes the role of currency substitution and of cross-border transfers...

In this paper we analyze the degree of policy convergence of EMS member countries relative to that of some non-EMS countries. Interestingly, we find convergence for the nominal and real exchange rates and money supplies of the EMS members but not for the non-EMS countries. We also provide some...

This paper examines some of the key issues in the conduct of Philippine monetary policy since 1984, including the various shocks to the economy and the monetary authorities’ choice of intermediate policy targets and instruments used to achieve those targets. Against this background, estimates...

This paper analyzes the financial policies pursued in the major industrial countries under the flexible exchange rate regime, and links misalignments in policies and their mixes to exchange rate variations among the major currencies. A number of indicators note that misalignments in fiscal...

This paper examines the relationship between monetary and exchange rate policies by considering the factors that have led the authorities in developed and developing countries in Asia to alter their use of monetary policy instruments and exchange rate arrangements since the mid-1970s. There is...

In View of the continuation of substantial movements in exchange rate relationships among major currencies, the recent increase in protectionist pressures, and the disappointing performance of world trade, renewed concern has been expressed about the possible adverse effects of exchange rate...

This paper proposes modifications to the method of collecting exchange rates for the calculation of the value of the SDR for the purposes of Rule O-2(a). The value of the SDR in terms of the U.S. dollar is determined daily as the sum of the equivalents in U. S. dollar values of the amounts of...