When the exchange rate fluctuates and the market exhibits hysteresis, planning horizons of domestic and foreign competitors will matter in determining pass-through as well as relative market shares of these firms. Using the Cournot duopoly model, it is shown that if the foreign exporter is a...

This paper demonstrates how a full-blown optimizing model of the dynamics of the current account can be reduced to a small-scale collection of reduced-form relations capable of implementing a rich set of macro-economic simulations. Emphasizing the role of shocks to productivity, labor...

The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and...

Using Chilean data, we document that for resource-rich small open economies the effects of terms of trade shocks on the wage gap (between skilled and unskilled workers) depend on factor intensities in the non-tradable sector, following the model in Galiani, Heymann, and Magud (2010). For a...

The ESF, established within the Poverty Reduction and Growth Facility and Exogenous Shocks Facility (PRGF-ESF) Trust, complements existing Fund instruments for providing timely support, including financing at more appropriate terms, to low-income members that are facing sudden and exogenous...

Using domestic and export price data and a framework of markup over cost, pricing behavior of U.S. and Japanese manufacturers is compared. Major export industries in Japan have higher productivity growth and lower pass-through coefficients than American exporters, who tend to price to domestic...

This paper investigates the impact of long-run terms-of-trade shocks. Analytically, we show that, if capital goods are largely importable or the labor supply is sufficiently elastic, then natural-resource booms increase aggregate investment and worsen the current account, but Dutch ‘Disease’...

This paper discusses a request from Samoa's authorities for a Disbursement Under the Rapid-Access Component of the Exogenous Shocks Facility (ESF-RAC). The tsunami that hit Samoa on September 29, 2009 has undercut Samoa’s economic resilience and prospects for a quick recovery from the global...