This note summarizes the main arguments put forward by some market commentators who argue that default is inevitable, and presents a rebuttal for each argument in turn. Their main arguments focus on the size of the adjustment and continued market concerns reflected in government bond spreads....

In response to the worst economic crisis since the 1930s, government budgets and central banks have provided substantial support for aggregate demand and for the financial sector. In the process, fiscal balances have deteriorated, government liabilities and central bank balance sheets have been...

Designing appropriate governance structures for an international financial institution such as the IMF is difficult, because steps to enhance the legitimacy of such an institution through constraints on its decision-making process may affect its operational efficiency. Potential trade-offs...

Implementation of fiscal consolidation by advanced economies in coming years needs to take into account the short and long-run interactions between economic growth and fiscal policy. Many countries must reduce high public debt to GDP ratios that penalize longterm growth. However, fiscal...

The GCC countries maintain a policy of open capital accounts and a pegged (or nearly-pegged) exchange rate, thereby reducing their freedom to run an independent monetary policy. This paper shows, however, that the pass-through of policy rates to retail rates is on the low side, reflecting the...

Over the past decade policy makers in Latin America have adopted a number of macroprudential instruments to manage the procyclicality of bank credit dynamics to the private sector and contain systemic risk. Reserve requirements, in particular, have been actively employed. Despite their...

This 2007 Article IV Consultation underlies that strong macroeconomic policies have enabled Cambodia to achieve impressive growth and make inroads into poverty. Supported by prudent fiscal and monetary policies that have strengthened the economy’s resilience to shocks, growth has averaged...

This 2013 Article IV Consultation highlights that Sierra Leone has made significant progress in macroeconomic stabilization over the last five years. Real GDP growth averaged some 7 percent, driven by output expansion in agriculture, mining, and services; as well as the scaling-up of...

This paper discusses key findings of the Second Review Under the Policy Support Instrument for Nigeria. All assessment criteria through end-September were met except for one civil service-related measure. Remedial measures have prevented the civil service reform program from being compromised....

This 2007 Article IV Consultation highlights that the economy of Barbados has been growing at a solid pace, and the outlook for 2007 is generally favorable. Robust output growth of about 4 percent is expected to continue in 2007, supported by tourism and construction. Inflation, which was pushed...