This paper (i) provides evidence on the procyclical investment behavior of major institutional investors during the global financial crisis; (ii) identifies the main factors that could account for such behavior; (iii) discusses the implications of procyclical behavior; and (iv) proposes a...

Monetary aggregates are now much less used as policy instruments as identifying the right measure has become difficult and interest rate transmission has worked well in an increasingly complex financial system. In this process, little attention was paid to the potential spillover of excess...

The economic and financial crisis is affecting the fiscal accounts of virtually every country. Public sector support for the financial system, fiscal stimulus and the automatic stabilizers, as well as the revenue decline from the downturn in commodity and asset prices, are leading to sharp...

The staff report for the Third Review under the Stand-By Arrangement and request for establishment of performance criteria focuses on Peru’s economic developments, outlook, and program for 2006. The Peruvian economy continues to perform well. Fiscal transparency has been increased,...

Algeria’s Financial System Stability Assessment highlights the Observance of Standards and Codes on monetary and financial policy transparency and banking supervision. Financial intermediation in Algeria will be bank-based in the future, and only politically difficult decisions to...

International capital flows from rich to poor countries can be regarded as either too low (the Lucas paradox in a one-sector model) or too high (when compared with the logic of factor price equalization in a two-sector model). To resolve the paradoxes, we introduce a non-neoclassical model which...

We employ an extended version of the Allen et al. (2002) Balance Sheet Approach to examine macroeconomic vulnerabilities in Colombia between 1996 and 2003, based on an unusually rich data set. We find that vulnerabilities existing prior to Colombia's 1999 recession-high levels of private debt, a...

Recent improvements in statistical methodologies and data availability are facilitating detailed, high-frequency, timely macroeconomic balance sheet analysis. This paper provides practical instruction on how to design the framework to analyze vulnerabilities in a country as well as an overview...

This paper examines the corporate financing pattern in Ghana. In particular, it investigates whether Singh's theoretically anomalous findings that developing country firms make considerably more use of external finance and new equity issues than developed country firms to finance asset growth...