The introduction of inflation targeting in 2006, together with important economic developments such as dedollarization, marked the beginning of a new macroeconomic framework in Armenia, which is likely to have changed the effectiveness of monetary policy. This paper is the first attempt to...

Forward-looking behavior on the part of the monetary authority leads least squares estimates to understate the true growth consequences of monetary policy interventions. We present instrumental variables estimates of the impact of interest rates on real output growth for several European...

Market reaction to a change in official interest rates will depend on the extent to which the change is anticipated, and on how it is interpreted as a signal of future policy. In this paper, a technique is developed to separate the anticipated and unanticipated components of such changes and is...

Developing countries fortunate enough to experience capital inflows haveseen rising levels of investment and enhanced economic growth. Capitalinflows have a negative side, however, in that they tend to appreciatethe domestic currency, making exports less competitive, and to encourageinflation....

In January 1992, Kazakstan initiated a reform program to move toward market-determined prices. The price liberalization process was characterized by large relative price shifts and an increase in the overall price level toward those observed in market economies. The paper shows how the piecemeal...

This paper employs several econometric techniques to estimate the Armenian output gap. The findings indicate that the output gap is significantly positive in 2007 and 2008 and decreased dramatically in 2009. The paper uses these results to estimate a New Keynesian Phillips curve for Armenia,...

Over the past decade policy makers in Latin America have adopted a number of macroprudential instruments to manage the procyclicality of bank credit dynamics to the private sector and contain systemic risk. Reserve requirements, in particular, have been actively employed. Despite their...

This Selected Issues paper on France underlies public intervention in financial markets. Econometric analysis indicates that in the long term, consumption tracks disposable income closely but is also affected by wealth effects. A counterfactual exercise suggests that a lower return to experience...

GDP growth is likely to remain strong, although narrowly driven by a mining investment boom, increasing the economy’s vulnerability to terms of trade shocks. Outside the mining sector, growth is expected to be slow with still weak consumer confidence and a strong exchange rate weighing on...

This 2013 Article IV Consultation highlights that the Australian economy has performed well relative to many other advanced economies since the global financial crisis. A transition phase has now been reached as the terms of trade-driven mining investment boom of the past decade has peaked, and...