This Selected Issues paper for the former Yugoslav Republic of Macedonia is examined. Real GDP growth accelerated to 5 percent in 2007 and 6 percent in the first half of 2008, from its historical average of about 3 percent. Increased investment, partly financed by FDI, is the main driver...

This paper focuses on two central issues related to the contrasting experiences of Malaysia and Pakistan regarding poverty reduction. First, it examines the structure of economic growth and its proximate determinants in the two countries, including the initial conditions, institutional changes,...

This paper investigates the role played by total factor productivity (TFP) in the tradable and nontradable sectors of the United States, the euro area, and Japan in the emergence and evolution of today's global trade imbalances. Simulation results based on a dynamic general equilibrium model of...

Using a variant of the IMF's Global Economy Model (GEM), featuring energy as both an intermediate input into production and a final consumption good, this paper examines the macroeconomic implications of large increases in the price of energy. Within a fully optimizing framework with nominal and...

The health of the Russian economy still depends heavily on natural resource revenues. The history of the economic collapse and recovery in 1970–2004 provides new evidence on the sources of Russian economic growth, while a survey of the economic literature suggests that the Russian economy...

Over the past two years, the IMF staff has been developing a new multicountry macroeconomic model called the Global Economy Model (GEM). This paper explains why such a model is needed, how GEM differs from its predecessor model, and how the new features of the model can improve the IMF’s...

Exchange rate pass-through in a set of euro area prices along the pricing chain is examined. Using a vector autoregression (VAR) approach, the empirics analyze the joint time-series behavior of the euro exchange rate and a system of euro-area prices in response to an exchange rate shock. The...

Based on a version of the IMF’s new Global Economic Model (GEM), calibrated to analyze macroeconomic interdependence between the United States and the rest of the world, this paper asks to what extent an asymmetric productivity shock in the tradable sector of the economy may account for real...

This paper examines the performance of different new open economy macroeconomic models in explaining the exchange rate pass-through in a wide range of prices. Quantitative versions of different models are used to derive the dynamic response of various prices to an exchange rate shock. Predicted...

This paper investigates the role played by emerging Asia in the emergence and evolution of the global trade imbalances. Based on simulations in a general equilibrium model of the world economy, we find that a productivity slowdown in the non-tradable sector of these economies in the second half...