The authors compare and contrast the design and outcomes of different foreign exchange auctions in four countries in sub-Saharan Africa and present a typology of such auctions. They identify two distinct sets of countries in terms of the auctions'features, policy interventions, and outcomes. In...

In countries where the black market premium on foreign exchange is exceptionally high, often more than 100 percent, lowering the black market rate to a level close to the market determined official rate will improve the balance of payments and increase exports. Floating the currency to...

Administrative exchange allocation has been common in developing countries, especially in sub-Saharan Africa. Steps to dismantle or modify these control mechanisms have been carried out through traditional schemes. The authors draw lessons from sub-Saharan Africa's historical experience useful...

Import prices in the U.S. have not responded as expected to large fluctuations in the exchange rate. This paper analyzes the response of Japanese and U.S. steel prices to changes in the yen-dollar exchange rate (the exchange rate pass-through, or percentage change in import prices as a result of...

Structural adjustment programs in sub-Saharan African countries in the 1980s removed trade restrictions, price controls, and export taxes and abolished state-owned commodity marketing bodies. The authors studied the effects of these policy changes on the coca sector, using a global econometric...

A key question for stabilization programs concerns how governments get into fiscal difficulty in the first place. Accordingly, this paper is about fiscal policy issues that arise during such macroeconomic stabilization in developing economies. Specifically, this report sets out the basics, as...

The growing adoption of an inflation targeting framework in emerging market economies has increased the importance of understanding inflation dynamics and forecasting its future path in these countries. The author considers the case of Turkey and investigates the performance of models that have...

This paper evaluates Chile's stabilization policies since the early 1970s. Four episodes are examined: (a) the high inflation at the beginning of the military regime when inflation was close to 1000 percent per year; (b) the orthodox stabilization program of 1975; (c) the exchange rate-based...

Bulgaria's shaky macroeconomic situation is a serious obstacle for a smooth transition from central planning to markets. It has to correct large current account deficits with the convertible currencyarea. It has to eliminate inflationary pressures and large price distortions, and get into a path...

The author analyzes the macroeconomic effects of inflation in the nontradables sector of a small open economy to suggest how different macroeconomic policies would facilitate structural adjustment after price liberalization in a transition economy. She uses a Mundell-Fleming rational...