This paper develops a 2-country New Keynesian overlapping generations model suitable for the joint evaluation of monetary and fiscal policies. We show that a permanent increase in U.S. government deficits raises the world real interest rate and significantly increases U.S. current account...

We develop a New-Open-Economy-Macro model in which Ricardian equivalence does not hold because of (i) distortionary labor and corporate income taxation; (ii) limited asset market participation; and (iii) because the overlapping-generations structure results in a disconnect between current and...

The effectiveness of recent fiscal stimulus packages significantly depends on the assumption of non-Ricardian savings behavior. We show that, under the same assumption, fiscal deficits can have worrisome implications if they turn out to be permanent. First, if they occur in large countries they...

This paper presents the primary institutions and economic policies that have led to Chile’s remarkable record of stability and growth over the past twenty years. The core of this policy stance is the combination of fiscal discipline and an open trade policy regime, together with carefully...

The key policy challenge for Turkey in the years ahead will be to enhance and consolidate the advances made since the nation’s 2000-01 economic crisis. Higher growth could reduce unemployment and raise living standards toward European Union levels. This paper reviews Turkey’s...

This 2004 Article IV Consultation highlights that economic growth in South Africa slowed in 2003 to 1.9 percent, from 3.6 percent in 2002, despite strong domestic demand. Fuelled by low interest rates, a more expansionary fiscal stance, and the wealth effects from strong commodity and property...

This Selected Issues paper and Statistical Appendix surveys the main reasons for Papua New Guinea’s disappointing economic performance, highlighting the key impediments to growth in each of the main sectors of the economy. The paper outlines the structural reforms that could help reduce...

The staff report for the Request for a Three-Year Arrangement Under the Poverty Reduction and Growth Facility highlights Benin’s economic developments and progress in structural reforms. Benin experienced a decade of good economic performance, but poverty reduction remains a concern....

This 2002 Article IV Consultation highlights that real GDP for St. Vincent and the Grenadines grew by a modest ¼ percent in 2001, well below the 4 percent average for the previous three years. Preliminary estimates for 2002 indicate about a pickup in real GDP growth to about 1 percent owing...