We study the implications of financial-market imperfections on labor and capital misallocation in China. Financial friction stems from private sectors' credit constraints that limit the efficient use of capital relative to state firms. Our model can jointly explain labor flows out of and capital...

This paper presents Bank of Canada staff's current assessment of the US neutral rate, along with a newly developed set of models on which that assessment is based. The overall assessment is that the US neutral rate currently lies in a range of 1.75 to 2.75 percent. This represents a decline of...

A small-scale open economy dynamic stochastic general equilibrium (DSGE) model is used to examine Philippine monetary policy. The model's parameters are estimated using Bayesian methods. Posterior odds tests are conducted to compare models with different specifications of the policy rule. These...

Teacher quality is crucial to deliver good education. However, improving teacher quality in developing countries can be a tough problem. This paper investigates the impact of a teacher placement program that sends college graduates with a strong academic track record to teach in rural primary...

We provide new evidence on the spillover effects from US interest rate changes, focusing on factors that are pertinent to the current conjuncture: weak recovery prospects in emerging market and developing economies (EMDEs), and the confluence of macroeconomic shocks shaping the path of interest...

The authors review the challenges that the Romanian economy and society had to face in the European and global geoeconomic context. Starting from the perspectives advanced by the international economic fora, the risks the European economy will have to answer through counteracting and general...

This paper evaluates the prospects for the renminbi's role as an international currency and the implications for global financial markets. Although the People's Republic of China (PRC) does not have either an open capital account or a flexible exchange rate, the renminbi has attained...

This paper examines the fiscal and monetary policy options available to China as a sovereign currency-issuing nation operating in a dollar standard world. We first summarize a number of issues facing China, including the possibility of slower growth, global imbalances, and a number of domestic...

This paper argues that the implications of globalization for monetary policy come mainly through two channels: On the one hand, the many structural changes, which are associated with the globalization process, cause an increase in uncertainty surrounding monetary policy. This leads to an...

Unlike common wisdom, sterilized FX purchases under inflation targeting, i.e., those that keep the interest rate at the level targeted by the central bank, generally increase aggregate demand. We resort to a simple model with a credit channel to argue that FX purchases, by funding bank credit,...