Nigeria's oil boom has not brought an end to perennial stagnation in the non-oil economy. Is this the unavoidable consequence of the resource boom or have misguided policies contributed? This paper indicates that the extreme volatility of expenditure rather than Dutch Disease effects are behind...

This paper presents a pricing model for secondary market debt designed to assess the market value of various forms of guarantees and the impact of debt reduction on the value of remaining claims. The model is more flexible and realistic than other models. The technique used, option pricing,...

This paper derived closed form solutions for the pricing of options on average prices and recapture clauses. On this basis, the values of recapture clauses in the Mexico and Venezuela agreements under alternative assumptions regarding the state variable underlying the clauses are estimated. The...

Should countries such as Poland or the USSR move toward more flexible prices gradually or in a"big bang?"Why is it that governments committed to eventual price flexibility so often seem to be unable to let go of"temporary"controls? Why, after price increases early in a program of price controls,...

Russia entered the global crisis with strong fiscal position, low public debt, and large fiscal and monetary reserves, which helped it cushion the crisis shocks. But the rise in the non-oil fiscal deficit in 2007-08 and, more importantly, the massive impact of the global crisis in late 2008 and...

Support for economic reforms has often shown puzzling dynamics: many reforms that began successfully lost public support. This paper shows that learning dynamics can rationalize this paradox because the process of revealing reform outcomes is an example of sampling without replacement. This...

Survey results in Poland indicate that hard budgets and import comeption can spur state firms to adjust even when privatization lags behind. As they examine the underpinning of Polish reform, the authors address the key question of why managers instigated such adjustment. They examine how...

Bulow and Rogoff showed in 1988 that auction based purchases of debt could not be an effective way to capture the secondary market discount, since the purchase pushes up the secondary market afterward. The author of this report points out another problem with cash debt buy backs - one that...

Rapid trade liberalization is often followed by a surge of imports and a deterioration in the current account. The macroeconomic counterpart of this is a decline in private savings. This paper discusses the impact of policy uncertainty on private savings. The author uses the Ordinal Certainty...

Interest rates fell sharply after Mexico's Brady deal, and private investment and growth recovered. The authors show that the main benefit of debt relief was not to lower expected payments but to reduce uncertainty. Reduced uncertainty was found to be the dominant factor in explaining the...