The staff report for the 2008 Article IV Consultation of the Former Yugoslav Republic of Macedonia discusses economic developments and policies. The new government’s economic program aims to raise growth further, but does not address these vulnerabilities. Plans to increase the central...

Delegating fiscal decision making power to sub-national governments has been an area of interest for both academics and policymakers given the expectation that it may lead to better and more efficient provision of public goods and services. Decentralization has, however, often occurred on the...

This paper investigates the impact of low or high inflation on the public debt-to-GDP ratio in the G-7 countries. Our simulations suggest that if inflation were to fall to zero for five years, the average net debt-to-GDP ratio would increase by about 5 percentage points over the next five years....

High public debt often produces the drama of default and restructuring. But debt is also reduced through financial repression, a tax on bondholders and savers via negative or belowmarket real interest rates. After WWII, capital controls and regulatory restrictions created a captive audience for...

Several models establish a positive association between public debt ratios and long-term real yields, but the empirical evidence is not always conclusive. We reconsider this issue, focusing in particular on possible spillover effects of large advanced economies' debt levels to other economies'...

Portugal's program implementation is on track despite difficult economic conditions and significant legal challenges. The markedly weaker economic outlook provides a strong case for recalibrating the program’s fiscal targets. This strong adjustment effort needs to be consolidated by...

Samoa was hit hard by a strong tropical cyclone, and the authorities are to be commended for their swift response to the resulting disaster. Economic growth this fiscal year is expected to be significantly lower than projected prior to the cyclone, but there are encouraging signs of early...

In this paper we develop a two-country dynamic general equilibrium model by means of which we seek to explain the long-run paths of a converging emerging market economy. We borrow a paradigm from the New Open Economy Macroeconomics literature and amend it to address specific features such as...

Regional trade arrangements (RTAs) in Africa have been ineffective in promoting trade and foreign direct investment. Relatively high external trade barriers and low resource complementarity between member countries limit both intra- and extraregional trade. Small market size, poor transport...