In principle, the sovereign credit rating industry could help mitigate the congestion externalities common to world capital markets that arise from the failure of market participants to internalise the social cost of external borrowings. This would require that modifications in ratings on...

The variety of channels through which devaluation of the exchange rate impacts on real tax receipts, calls for empirical clarification. This paper should be seen as a first attempt towards empirical evidence. It establishes the causal relationships between the real exchange rate and real tax...

The increased importance of rating agencies for emerging-market finance has brought their work to the attention of a wider group of observers — and under criticism. This paper evaluates whether the importance of ratings for developing-country finance has changed since the Asian Crisis and...

Three novel macroeconomic policy challenges are discussed in this paper: the macroeconomic implications of China’s emergence; the implications of intensifying financial integration; and the interaction of Asia’s foreign exchange regime with monetary policy in the OECD area. First, China may...

The paper evaluates the economics of foreign investment regulation for pension funds, with a focus on developing countries, where fully-funded pension systems are being started de novo. The analysis produces three observations. First, the benefits of global portfolio diversification apply...

Strong growth in China and India has led to improvements in raw-material exporting countries' terms of trade and attracted complementary finance. The long-term challenge for these countries, where institutions are often fragile, is to avoid the so-called “resource curse”. This paper aims to...

The 1990s have witnessed pronounced boom-bust cycles in emerging-markets lending, culminating in the Asian financial and currency crisis of 1997-98. By examining the links between sovereign credit ratings and dollar bond yield spreads over 1989-97, this paper aims at broad empirical content for...

The recent currency crises in Latin America and Asia have hit countries with strong macroeconomic fundamentals but weak domestic financial systems. Private capital flows, attracted by disorderly financial liberalisation and exchange rate pegs, reversed abruptly when financial-sector weaknesses...

This paper provides statistically significant international evidence on the interaction between funded pensions and aggregate savings, after controlling for country-specific effects and for other saving determinants that have typically been identified in earlier cross-country studies. Using...

The paper discusses the pros and cons of liberalising foreign investment of pension assets in developing countries, with particular reference to Chile. The positive part of the paper examines the impact on macroeconomic policy of a small country's opening its equity market for investment; the...