The recent financial crisis raises important issues about the transmission of financial shocks across borders. In this paper, a global vector autoregressive (GVAR) model is constructed to assess the relevance of international spillovers following a historical slowdown in U.S. equity prices. The...

In recent years, New Keynesian dynamic stochastic general equilibrium (NK DSGE) models have become increasingly popular in the academic literature and in policy analysis. However, the success of these models in reproducing the dynamic behavior of an economy following structural shocks is still...

This 2004 Article IV Consultation highlights that Israel’s economic recovery is under way after a prolonged recession. Growth is being supported by more favorable global economic conditions, an improvement in the security situation, and appropriate policies, which have included tightening...

This paper presents the primary institutions and economic policies that have led to Chile’s remarkable record of stability and growth over the past twenty years. The core of this policy stance is the combination of fiscal discipline and an open trade policy regime, together with carefully...

This paper reviews recent advances in the specification and estimation of Bayesian Vector Autoregressive models (BVARs). After describing the Bayesian principle of estimation, we first present the methodology originally developed by Litterman (1986) and Doan et al. (1984) and review alternative...

This paper empirically evaluates the validity of the term structure of interest rates in a low-interest-rate environment. Applying a time-series method to high-frequency Japanese data, the term-structure model is found to be useful for economic analysis only when interest rates are high. When...