The paper finds that simple econometric specifications yield surprising rich and complex dynamics -- relative prices respond to the nominal exchange rate and pass-through effects, import and export volumes respond to relative price changes, and the trade balance responds to changes in import and...

This paper uses an intertemporal optimizing model of a small open economy to analyze how terms of trade changes affect real exchange rates and the trade balance. We consider temporary current, anticipated future, and permanent changes in the terms of trade. The results suggest that the...

This paper presents an overview of the different methodologies that can be used to measure the amount of available slack in an economy. A comparison of these alternatives reveals that the evolution of the Nairu is crucial for understanding recent cyclical developments in the French economy. A...

The global recovery continues. Although it is not yet complete, the more favorable conjuncture offers an opportunity to tackle key policy challenges to stave off medium-term downside risks, rebuild buffers, and raise potential output. Countries should undertake well-sequenced reforms to increase...

This letter provides an assessment of recent macroeconomic developments in Swaziland and an update on the discussions between IMF staff and the Swaziland authorities. Swaziland faces a fiscal crisis caused by an 11 percent of GDP drop in revenue payments from the Southern African Customs Union...

This paper provides an overview of the likely impact of the creation of the European Community (EC) internal market on the European Free Trade Association (EFTA) members. The focus is on the four freedoms and the institutional and legal changes required for increased economic cooperation between...

This paper explains different features of the MULTI-region econometric MODel (MULTIMOD). MULTIMOD is designed to examine the effects on that baseline of scenarios that involve changes in policies in major countries and other exogenous changes in the economic environment. The Mark II version...