How does access to credit impact consumption volatility? Theory and evidence from advanced economies suggests that greater household access to finance smooths consumption. Evidence from emerging markets, where consumption is usually more volatile than income, indicates that financial reform...

The paper uses a multi-region DSGE model to quantify the macroeconomic implications of three adjustment scenarios for India: growth-friendly, social-friendly, and a benchmark case centered on bringing down unproductive spending and strengthening the consumption tax. Simulations indicate that...

Emerging market policy makers have been concerned about the financial stability implications of financial globalization. These concerns are focused on behavior under stressed conditions. Do tail events in the home country trigger off extreme responses by foreign investors – are foreign...

This paper assesses the extent to which Sub-Saharan Africa (SSA)’s business cycle is synchronized with that of the rest of the world (RoW). Findings suggest that SSA’s business cycle has not only moved in the same direction as that of the RoW, but has also gradually drifted away...

This paper documents the recent slowdown in investment in India and explores its underlying causes. The sharp investment deceleration has sparked an intense debate about the role of interest rates, as well as business confidence and economic policy uncertainty. Our results suggest that while...

Purpose – Earlier studies establish a positive relationship between volatility index (VIX) and the stock index returns. These studies are mainly restricted to developed markets and research in this regard in emerging markets is scarce. The purpose of this paper is to fill this gap....