This paper shows that the presence of quotas on imported inputs that are based on installed capacity can lead to capacity underutilization in manufacturing industries of developing countries. A replacement of such quotas, by tariffs leads to full capacity utilization under assumptions of both...

The paper presents a DGE model designed as a core projection tool to support monetary policy in inflation-targeting (IT) emerging market economies. The paper uses a particularly simple and flexible general equilibrium model structure that can be amended to account for various phenomena that...

This paper develops and calibrates a simple general equilibrium model with two types of labor and capital for the French economy. The simulation results indicate that targeted reductions in employer social security taxes have six times as large an effect on employment as untargeted reductions...

The paper presents a general equilibrium framework for short-run macroeconomic analysis in a developing country context where controls on interest rates and foreign exchange restrictions lead to the emergence of informal financial markets. The complexity of the model precludes an analytical...

Many arguments that have been advanced in favor of maintaining capital controls within the EC have not paid sufficient attention to the welfare consequences of this type of market intervention. Our paper provides a simple, optimizing framework in which the welfare consequences of capital...

In addition to transferring about 16 percent of GDP from exporters to importers, Uzbekistan’s quasi-fiscal multiple exchange rate regime generates identifiable welfare losses of 2-8 percent of GDP on import markets and up to 15 percent on export markets. These excess burdens have increased...

The paper proposes a new welfare-based measure to evaluate the distributive effects of public programs. The proposed measure differs from traditional approaches in two important ways: first, it is based on life-cycle considerations, since most public expenditure programs have an intertemporal...

This Selected Issues paper on Euro Area Policies underlies global rebalancing of accounts. From a growth-accounting perspective, slower growth in the capital-labor ratio seems to be the main driver behind the deceleration in labor productivity. The increase in bilateral trade was accompanied by...

This Selected Issues paper analyzes the challenge of population aging for Belgium. It argues that the aging strategy should be broadened to include more explicitly the objective of raising employment rates to foster potential growth. The paper discusses assumptions underlying the official aging...

Real unit labor costs (RULC) growth differentials between euro area members have persisted since EMU began and even widened out in the run-up to the crisis. This paper focuses on the causes underlying such dispersion. According to our empirical findings, persistent RULC growth differentials can...