Estimating the degree of exchange-rate misalignment remains one of the most challenging empirical problems in an open economy. The basic problem is that the value of the real exchange rate is not observable. Standard theory tells us, however, that the equilibrium real exchange rate is a function...

The authors develop and apply a macroeconomic general equilibrium model for Zimbabwe. The country faces the challenge of engaging in a program of fiscal stabilization and structural reform to address its current fiscal imbalance, high unemployment, and low growth prospects. The authors discuss...

Bahrain's oil-producing economy is vulnerable to terms-of-trade shocks for oil in the short to medium run. But the country's dependence on nonrenewable hydrocarbon resources represents a more basic constraint on Bahrain's prospects for long-term economic growth and welfare. To maintain economic...

A large thriving parallel market for foreign exchange has coexisted with a rich menu of official exchange rate policies aimed at achieving a more flexible exchange rate and price system as well as financial and trade liberalization. Despite aggresive policies in these areas, particularly for the...

Using a methodology that allows for endogenizing decisions to participate in World Bank adjustment lending programs, and for testing the validity of assumptions about program participation, the author studies the effectiveness of these programs in sub - Saharan Africa. He shows that adjustment...

Bahrain's economy is characterized by producer and consumer subsidies and, possibly misaligned currency. These subsidies have resulted in lower savings rates than would be consistent with the country's endowment in oil and gas. In addition, the misaligned real exchange rate has encouraged...

Starting from the premise that agriculture should be pivotal in the structural transformation and economic development of sub - Saharan Africa, the author addresses two related issues. First, the extent to which policy induced distortions influence the structure of incentives for agriculture...

The author uses a simple general equilibrium model to derive a forward-looking linear solution for the premium on the black market for foreign exchange in Sudan. His solution accounts for the long-run fundamentals of the premium that operate through the current account balance. It also accounts...

In the context of an empirical model, the authors examine the impact of capital flows, among other fundamentals, on long-term exchange rates in Chile. The real exchange rate and its fundamentals were found to be cointegrated during 1960-92. This cointegration allows a reinterpretation of...