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...

This paper reviews developments in pension systems in 11 transition economies during the 1990s, highlighting the forces behind their rapid weakening. It focuses on the challenges these systems face—including those arising from demographic factors—and discusses why most transition countries...

This paper explains inflation performance in a sample of industrial and transition economies by looking at policymakers’ incentives to inflate the economy, and the perceived costs of disinflation. It finds a significant effect of fiscal deficits on inflation, particularly (but not exclusively)...

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...

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....

This paper provides a framework for evaluating the decision to enter a currency area, including the best timing for entry, and uses it to evaluate the assessment of the five tests for euro entry published by the U.K. Treasury in June 2003. The breadth and depth of its assessment is impressive by...

Many countries, including several transition economies, have in the last few years recorded a sharp decline in inflation, but have been unable to bring inflation down to lower single digits or to achieve price stability. In these countries, inflation has stabilized at moderate levels, with...

We review the main issues that arise in the design of treasury bill auctions and survey the relevant empirical literature. We also provide a detailed description of the actual design of these auctions in a sample of 42 industrial and developing countries

This paper considers the behavior of the yield differential between government and nongovernment bonds in Italy between 1976 and 1988. It is shown that the trend increase of the differential observed in this period was significantly influenced by the deterioration of public finances, as...

This book, edited by Tomás J.T. Baliño and Carlo Cottarelli, addresses some of the strategic issues faced by policymakers in the choice of a monetary regime. Following an overview of some of these issues, the book considers the various theoretical or practical frameworks for the implementation...