This Selected Issues paper discusses Romania’s modeling monetary policy. A simple Forecasting and Policy Analysis System (FPAS) for Romania has been designed to help in the preparation of the IMF staff’s forecasts and policy assessments. A major advantage of this approach is that...

Nominal interest rate pegging leads to instability in an IS-LM model with a vertical long-run Phillips curve and backward-looking inflation expectations. However, it does not lead to instability in several large multicountry econometric models, apparently primarily because these models have...

A small macroeconomic model based on familiar theoretical considerations is developed and estimated using data from 31 developing countries. Efficient estimation techniques are used to control for country heterogeneity under the assumption of rational expectations. The estimates and the test...

The dynamic responses of a developing economy to a variety of policy and external shocks are studied using an empirical macroeconomic model which embodies rational expectations, perfect capital mobility, and import rationing. These features, which are relatively new in developing-country...

This is the fourth of a series of papers that are being written as part of a larger project to estimate a small quarterly Global Projection Model (GPM). The GPM project is designed to improve the toolkit to which economists have access for studying both own-country and cross-country linkages. In...

This paper provides model-based projections of inflation, and quantifies the impact of the factors that determine inflation. The reasons behind the poor labor market performance in Greece and the remedial policies are discussed. The new economy is at a relatively early stage of development in...

This Selected Issues paper looks at short-term inflation dynamics in the new member states (NMS) of the European Union, focusing on the role of monetary policy regimes. It models the determinants of inflation in the NMS and assesses how different theoretical frameworks best fit the data. The...

This Selected Issues paper examines Israel’s monetary policy regime with an eye toward developing some understanding of why breaches have been occurring and how to address them. The paper provides a brief history of Israel’s experience with inflation and inflation targeting. It...

This Selected Issues paper on Denmark underlies estimates of inefficiencies in the goods and labor markets. The IMF’s new macroeconomic model, the global economic model (GEM), has been used to provide estimates of the impact of successfully implementing the European Council’s...

This paper focuses on the 2005 Article IV Consultation and Review of the Program Supported by Emergency Post-Conflict Assistance for Haiti. Economic and social conditions in Haiti deteriorated significantly during the early 2000, as the continued political stalemate undermined external financial...