For the past two decades, Chile has consistently pursued a course of macroeconomic stabilization and deep economic reform. But in recent years, real exchange rate appreciation and persistent moderate inflation have become key concerns for Chilean policymakers, suggesting the need for further...

The author describes a spread-sheet planning model to help determine the government deficit consistent with a policymaker's"vector"of principal macroeconomic objectives (including real GDP growth, inflation, exchange rate, and international reserve accumulation). The model focuses on the...

The authors identify as the primary cause of the East Asian crisis a fundamental reassessment of the profitability of investments in the region. They identify a number of secondary shocks as well, including interest risk premia, monetary expansion, and declines in output brought about by...

The authors argue that the recent Asian currency crisis was caused by large prospective fiscal deficits associated with implicit bailout guarantees to failing banking systems. They articulate this view using a simple dynamic general equilibrium model, whose key feature is that a speculative...

This paper simulates a model of joint determination of private investment spending, aggregate investment profitability and the level of GDP for Chile. It addresses the following issues: (a) sharp cycles in economic activity - the boom of 1980-81, the steep recession of 1982-83, and the recovery...

The author examines empirically the link between real exchange rate uncertainty and private investment in developing countries using a large cross country-time series data set. He builds a GARCH-based measure of real exchange rate volatility and finds that it has a strong negative impact on...

In 1985, Mexico shifted to a growth strategy based on private investment and exports rather than on import substitution and public sector investment. The policy implications of this study, are that to increase investment, Mexico should follow policies aimed at reducing investment adjustment...

Since Egypt's government introduced an economic reform and structural adjustment program in 1991, Egypt's Central Bank has been engaged in massive sterilized interventions to support the fixed nominal exchange rate regime. The result of this process, however, has been an increasing fiscal...

The academic and policy debate about optimal foreign exchange rate regimes for emerging economies, has focused more on the theoretical costs and benefits of possible regimes, than on their actual performance. The authors report on what can be called exchange-rate-regime-dependent differential...

Despite external shocks, Indonesia has maintained creditworthiness through swift adjustment. Indonesia's flexible economic management and clear policy signals have lent stability to the economy, in contrast to the stop and go reforms, uncertainty, and constant debt renegotiations in many high...