We show the importance of a dynamic aggregation bias in accounting for the PPP puzzle. We prove that established time-series and panel methods substantially exaggerate the persistence of real exchange rates because of heterogeneity in the dynamics of disaggregated relative prices. When...

The existing literature suggests a number of alternative methods to test for the presence of contagion during financial market crises. This paper reviews those methods and shows how they are related in a unified framework. A number of extensions are also suggested that allow for multivariate...

This paper estimates the effects of offshoring on productivity in U.S. manufacturing industries between 1992 and 2000, using instrumental variables estimation to address the potential endogeneity of offshoring. It finds that service offshoring has a significant positive effect on productivity in...

This paper assesses empirically the links among a country's institutions and political environment, its implementation of IMF-supported programs, and macroeconomic performance in a sample of 197 programs approved between 1992 and 2002. We find that a stronger institutional and political...

Empirical studies that use self-reported data on remittances to measure the latter's impact on microeconomic incentives mostly ignore the potential errors associated with reporting/measurement issues. An econometric procedure to control for these errors is developed and applied to...

This Joint Advisory Note on the Democratic Republic of the Congo discusses economic growth and employment-creating sectors. The agriculture and mining sectors are projected to continue their expansion, while simultaneously raising labor productivity and freeing up labor. The urban population is...

Côte d’Ivoire's government decided on the National Development Plan to give a new impetus to its development policy. This new strategy is based on an ambitious and realistic recovery and development program centered on private and public investment. The institutional monitoring framework for...

This paper on Senegal’s Poverty Reduction Strategy Paper discusses the economic, social, and environmental performance of policies, the political and institutional environment, and the constraints weighing on its growth as well as the challenges to be addressed. The shortage of basic...

This Selected Issues Paper discusses some observations on Singapore’s monetary policy framework. Singapore’s monetary policy uses the nominal effective exchange rate (NEER) as the instrument in a basket-band-crawl framework. The paper finds that under some conditions an exchange...

This Joint Staff Advisory Note focuses on the Poverty Reduction Strategy Paper (PRSP) for Kenya. Kenya’s second Medium Term Plan (MTP-2) that covers 2013–2017 seeks to build on the successes of the MTP1. It aims to accelerate growth to reach double-digit levels, to create jobs for...