This paper investigates the impact of long-run terms-of-trade shocks. Analytically, we show that, if capital goods are largely importable or the labor supply is sufficiently elastic, then natural-resource booms increase aggregate investment and worsen the current account, but Dutch ‘Disease’...

This paper analyses the dynamics of inflation in Kenya during 1974–96, a period characterized by external shocks and internal disequilibria. By developing a parsimonious and empirically constant error correction model the paper finds that the exchange rate, foreign prices, and terms of trade...

This paper investigates the impact of the distribution sector on the real exchange rate, controlling for the Balassa-Samuelson effect, as well as other macro variables. Long-run coefficients are estimated using a panel dynamic OLS estimator. The main result is that an increase in the...

Existing economic indicators and indexes assess economic activity but no single indicator measures the general macro-economic performance of a nation, state, or region in a methodologically simple and intuitive way. This paper proposes a simple, yet informative metric called the Economic...

We construct a new, comprehensive instrument-level database of sovereign debt for 18 advanced and emerging countries over the period 1913-46. The database contains data on amounts outstanding for some 3,800 individual debt instruments as well as associated qualitative information, including...

This paper analyzes budgetary subsidy policy issues that arise when centrally planned economies move toward a market economy. The analysis suggests that subsidy reduction, to be successful, has to be embedded into an overall economic reform program and that during the program’s execution,...

The transition from a command to a market economy requires profound reforms of the tax system. Such a transition will put downward pressures on the level of taxation at a time when public expenditure remains high. This paper outlines the main characteristics of the tax systems in...

This paper provides a brief historical journey of central banking in Latin America to shed light on the debate about monetary policy in the post-global financial crisis period. The paper distinguishes three periods in Latin America’s central bank history: the early years, when central banks...