The presence of high inflation raises questions about the usefulness of the conventional measure of the fiscal deficit as a gauge of necessary fiscal adjustment. Economists are divided on this issue: those who believe that regardless of inflation the conventional measure is the relevant one; and...

Staff Papers has, since its inception in 1950, been an important vehicle for the dissemination of research done by staff of the IMF. The paper discusses three areas in which articles published in Staff Papers up until the 1970s made major contributions to the literature in international...

In the middle of 1985 Argentina and Israel launched frontal attacks on inflation which succeeded in reducing it drastically during the first year without very significant costs in employment and output. Despite basic differences in the countries' structures, the programs were similar in their...

The behavior of private investment in developing countries has obvious implications, both for long-term development and for the design of shorter-term stabilization programs. What determines the rate of private investment and how this rate responds to changes in government policies are questions...

In recent years, some countries have adopted stabilization programs that have included the preannouncement of the future path of the exchange rate. This paper considers the circumstances under which the preannouncement of exchange rate changes helps to generate an adjustment process that results...

The relationship between international interest rate differentials and changes in exchange rates has been studied extensively for the major currencies. For such currencies, interest parity generally holds, after allowance has been made for transactions costs, political and sovereign risks,...

A central proposition regarding effects of different mechanisms of financing public expenditures is that, under specific circumstances, it makes no difference to the level of aggregate demand if the government finances its outlays by debt or taxation. This so-called Ricardian equivalence states...

In countries like the former Soviet Union, where wealth is mainly stored in monetary assets, the behavior of the money-income ratio is a poor indicator of the growth of undesired monetary balances (monetary overhang). In those countries a monetary overhang is primarily a wealth overhang, which...

This paper argues that the IMF's traditional monetary conditionality--a ceiling on net domestic assets of the central bank and a floor on its net international reserves--should be adapted in IMF-supported adjustment programs with countries that have a framework of explicit inflation targets for...

This paper argues that the IMF's traditional monetary conditionality--a ceiling on net domestic assets of the central bank and a floor on its net international reserves--should be adapted in IMF-supported adjustment programs with countries that have a framework of explicit inflation targets for...