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Predicting Macroeconomic and Macrofinancial Stress in Low-Income Countries

Weisfeld, Hans; de Carvalho Filho, Irineu; Comelli, Fabio; … - 2021

In recent years, Fund staff has prepared cross-country analyses of macroeconomic vulnerabilities in low-income countries, focusing on the risk of sharp declines in economic growth and of debt distress. We discuss routes to broadening this focus by adding several macroeconomic and macrofinancial...

Persistent link: https://www.econbiz.de/10013250073

Managing External Volatility : Policy Frameworks in Non-Reserve Issuing Economies

Poirson, Hélène; Porter, Nathan; Fayad, Ghada; Agur, Itai - 2021

Since the global financial crisis, non-reserve-issuing economies (NREs) have been highly sensitive to episodes of external pressures. With monetary policy independence constrained by this sensitivity, many NREs have utilized other policy instruments. This paper confirms the vulnerability of NREs...

Persistent link: https://www.econbiz.de/10013250074

Hang in There : Stock Market Reactions to Withdrawals of COVID-19 Stimulus Measures

Chan-Lau, Jorge A.; Zhao, Yunhui - 2021

The COVID-19 pandemic prompted unprecedented economic stimulus worldwide. We empirically examine the impact of a withdrawal of fiscal stimulus policies on the stock markets. After constructing a database of withdrawal events, we use event study analysis and cross-country regressions to assess...

Persistent link: https://www.econbiz.de/10013250077

Terms-of-Trade Shocks are Not All Alike

Di Pace, Federico; Juvenal, Luciana; Petrella, Ivan - 2021

When analyzing terms-of-trade shocks, it is implicitly assumed that the economy responds symmetrically to changes in export and import prices. Using a sample of developing countries our paper shows that this is not the case. We construct export and import price indices using commodity and...

Persistent link: https://www.econbiz.de/10013250081

Public Debt Dynamics and Intra-Year Exchange Rate Fluctuations

Acosta Ormaechea, Santiago - 2021

-of-period exchange rates, respectively, as envisaged in public finance manuals, gives rise to an identifiable stock-flow adjustment term …-ignored stock-flow adjustment term is critical to accurately project public debt levels and any related indicator that could in turn … stock flow adjustment term is sizable in countries experiencing large exchange rate depreciations, namely above the 99th …

Persistent link: https://www.econbiz.de/10013250098

What Do We Talk About When We Talk About Output Gaps?

Barkema, Jelle; Gudmundsson, Tryggvi; Mrkaic, Mico - 2021

Estimates of output gaps continue to play a key role in assessments of the stance of business cycles. This paper uses three approaches to examine the historical record of output gap measurements and their use in surveillance within the IMF. Firstly, the historical record of global output gap...

Persistent link: https://www.econbiz.de/10013252017

Monetary Policy Surprises and Inflation Expectation Dispersion

Grigoli, Francesco; Gruss, Bertrand; Lizarazo, Sandra - 2021

Anchoring of inflation expectations is of paramount importance for central banks' ability to deliver stable inflation and minimize price dispersion. Relying on daily interest rates and inflation forecasts from major financial institutions in the United States, we calculate monetary policy...

Persistent link: https://www.econbiz.de/10013252031

India's Inflation Process Before and after Flexible Inflation Targeting

Blagrave, Patrick; Lian, Weicheng - 2021

We study the inflation process in India, focusing on the periods before and after the adoption of flexible inflation-forecast targeting (FIT) in India. Our analysis uses several approaches including standard Phillips curve estimation for headline and core inflation, an examination of the...

Persistent link: https://www.econbiz.de/10013252032

Optimal Simple Objectives for Monetary Policy When Banks Matter

Laureys, Lien; Meeks, Roland; Wanengkirtyo, Boromeus - 2021

We reconsider the design of welfare-optimal monetary policy when financing frictions impair the supply of bank credit, and when the objectives set for monetary policy must be simple enough to be implementable and allow for effective accountability. We show that a flexible inflation targeting...

Persistent link: https://www.econbiz.de/10013252039

Inflation Expectations in the U.S : Linking Markets, Households, and Businesses

Williams, Peter D. - 2021

Inflation has been below the Federal Reserve's target for much of the past 20 years, creating worries that inflation may be deanchoring from the FOMC's target. This paper uses a factor model that incorporates information from professional forecasters, household and business surveys, and the...

Persistent link: https://www.econbiz.de/10013252044