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 analyzes the dynamics of the real exchange rate and the price of equity for a small open economy using an optimizing model in which the process of capital accumulation entails adjustment costs. The analysis demonstrates that along an adjustment path toward long-run equilibrium,...

The paper examines the case for contingent financial instruments for low-income countries (LICs), from both the market and official sector. These include commodity price hedging instruments, contingent debt instruments (commodity-linked bonds, deferred repayment loans), and natural disaster...

This paper examines the types of market-related hedging instruments that could potentially be useful to indebted developing countries as they seek to manage the financial risks created by variability of the prices of external assets and commodities. The paper reviews the variability in interest...

This paper surveys that state of fiscal transparency in the wake of the current crisis and looks at what can be done to improve it. It examines the relationship between fiscal transparency and fiscal outcomes; reviews progress in promoting greater fiscal transparency over the past decade; considers...

The rapid recovery in many low-income countries (LICs) following the global crisis has been sustained in 2012. Softening commodity prices have led to moderating inflation pressures in most LICs. However, progress in rebuilding policy buffers has halted over the past two years, despite continued...

An assessment of vulnerabilities and risks in LICs remains important both for LICs themselves and for the international community. There are currently 74 LICs, eligible for concessional financing from the Fund. This group of countries has a total population of about 1.3 billion, with an average...

This study characterizes volatility dynamics in external emerging bond markets and examines how prices and volatility respond to news about macroeconomic fundamentals. As in mature bond markets, macroeconomic surprises in external emerging bond markets are found to a¤ect both conditional...