The optimal provision of loan guarantees or deposit insurance is examined in the context of an overlapping generations model. It is demonstrated that even in the face of a market imperfection that precludes diversification of the private sector’s loan portfolio to eliminate risk, full...

A firm theoretical basis for the empirical relationship between dependency rates and savings behavior in developing countries is still lacking. Two demographic extensions of the representative household’s stochastic dynamic optimization problem are presented here. It is shown that the...

This paper examines whether financial deregulation in the 1980s has reduced the importance of liquidity constraints in consumption patterns. Data for six industrialized countries are used to estimate a simple model incorporating liquidity constraints and forward looking behavior. It is concluded...

This Selected Issues paper analyzes sustaining potential growth in Aruba. As in the other Caribbean countries, there are growing concerns in Aruba about the slowdown in economic growth over the past two decades and the consequent tepid outlook for potential growth. Tackling such concerns...

In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.

This Selected Issues paper examines implications of capital account liberalization in Iceland. Capital controls were critical in 2008 to avoid a more severe collapse of the Icelandic economy. Six years later, capital inflows have been liberalized, but most outflows remain restricted. Iceland has...

This paper discusses key findings of the 2005 Status Report on Poverty Reduction Strategy Paper (PRSP) on Niger. The report is based on an assessment of economic and financial performance and sectoral policy and strategy implementation in 2005. The findings reveal that implementation of the...