Monetary and fiscal policies around the world are in better shape today than two decades ago. This paper studies whether financial globalization has helped induce governments to pursue better macroeconomic policies (the "discipline effect"). The empirical tests have two innovations. First, we...

This paper analyses the influence of economic fluctuations on the financing decisions of companies from Indonesia and Malaysia from 1996 to 2005. Our results show that companies with better access to external capital and those that adjust their financial structures faster outperform other...

The Mexican banking crisis of 1994/95 necessitated a major government rescue operation - estimated to have cost about 20 per cent of GDP. Since then, financial sector reforms have been implemented and the performance of the Mexican financial system has markedly improved, as shown by indicators...

The IMF's internal analysis of exchange rate issues has been guided by, and limited by, the conceptual and empirical frameworks that have emerged from the collective research of the economics profession. The research has provided several general approaches that are useful for assessing whether...

In many countries, authorities have designated a group of financial firms as the principal intermediaries in the government securities market-referred to as "primary dealers" or a "primary dealer system." This paper discusses policy issues related to the establishment of a primary dealer system...

This paper recounts Chile’s experience with capital account policies since the 1990s. We present how two external shocks were confronted under very different macroeconomic and capital account frameworks. We show that during the 1997-98 Asian-LTCM-Russia crisis, a closed capital account and...

Staff Discussion Notes showcase the latest policy-related analysis and research being developed by individual IMF staff and are published to elicit comment and to further debate. These papers are generally brief and written in nontechnical language, and so are aimed at a broad audience...

Credit channel of monetary transmission mechanism provides an alternative transmission channel of monetary shock through the asset side of the banking system. Based on the literature on market imperfection, it presents some appealing arguments on supply side effects of innovations in monetary...

The Korean economy is slowing in the face of strong global headwinds. It is projected to bottom out during the course of 2012, regaining momentum towards the end of the year, in line with the global recovery. The main short-term risk to the outlook is a further intensification of the euro area...