This paper analyzes the optimal transition of the exchange rate regime in the People’s Republic of China (PRC). How the PRC can successfully reach the desired regime—whether a basket peg or floating regime—from the current dollar-peg regime remains a major question. To answer it, we...

In this paper, the IMF's new Global Economy Model (GEM) is used to estimate the contribution of unbalanced growth to the decline in the share of goods production in Australia and New Zealand. The simulation results suggest that faster productivity growth in the tradable goods sector in...

Two kinds of theories of boundedly rational behavior are possible. Static theories focus on stationary behavior and do not include any explicit mechanism for temporal change. Dynamic theories, on the other hand, explicitly model the fine-grain adjustments made by the subjects in response to...

Over the last decade, GDP growth in emerging Asia was roughly twice as fast as average world growth. The IMF’s Global Economy Model (GEM) is used to estimate the impact that emerging Asia’s growth differential has had on Australia. The simulation analysis, which replicates some key...

This paper investigates inflation persistence under Threshold Autoregressive (TAR) model motivated by the fact that inflation in Nepal goes through different degrees of persistence based on various regime shifts. Using monthly time series of the Consumer Price Index (CPI) from 1998:01 to...

A.D. Roy's original formulation of the Safety-First Principle is used to derive models of the portfolio composition of the banking sector in Pakistan. To estimate the models we use data for 1964-2005 and for 2005-2008 for forecasting. Various models are estimated, wherein loads are segrated into...

The paper presents a comparative analysis of macroeconomic dynamics of 18 Arab countries based on a panel vector autogression estimation. Comparing growth performance, fiscal and current account developments in these countries, the study concludes that (1) in the short run, external and...

This Selected Issues paper on Denmark underlies estimates of inefficiencies in the goods and labor markets. The IMF’s new macroeconomic model, the global economic model (GEM), has been used to provide estimates of the impact of successfully implementing the European Council’s...

IMF lending is conditional on a country's commitment to carry out an agreed program of economic policies. Unless that commitment is genuine and broadly held, the likelihood of implementation will be poor. Is there a conflict between national commitment and conditional finance? Are national...