We estimate the pricing of sovereign risk for sixty countries based on fiscal space (debt/tax; deficits/tax) and other economic fundamentals over 2005-10. We measure how accurately the model predicts sovereign credit default swap (CDS) spreads, focusing in particular on the five countries in the...

New Zealand was successful in switching from a moderate inflation regime to a low-inflation regime between 1986-92. This success is attributable both to a restrictive monetary policy, political support for the policy, and wide-ranging institutional reforms in the economy--including important...

A large literature on the appropriate sequencing of financial liberalization suggests that removing capital controls prematurely may contribute to currency instability. This paper investigates whether legal restrictions on international capital flows are associated with greater currency...

Finland was the only Nordic country to join the European Monetary Union (EMU) when it began on January 1, 1999. In the autumn of 1994, the voters of Sweden and Finland decided to join the European Union (EU), while those in Norway decided to remain outside. In Denmark, the voters had earlier...

We investigate the output effects of severe currency crises in emerging markets. Using a panel data set over the 1975-97 period and covering 24 emerging-market economies, we find that currency and balance of payments crises?even after controlling for other factors?reduce output by about 5-8...

This paper investigates the output effects of IMF-supported stabilization programs, especially those introduced at the time of a severe balance of payments/currency crisis. Using a panel data set over the 1975-97 period and covering 67 developing and emerging-market economies (with 461 IMF...

We argue that only limited information on the costs and benefits of participating in a new monetary union may be inferred from historical economic relationships. A major objective of the EU is to foster stronger economic ties, and this process will tend to increase the degree of compatibility...

We develop an alternative test of the "German view" that fiscal contractions may lead to immediate consumption booms derived from a form of an open-economy permanent income model where we add uncertainty over whether shocks are permanent or transitory. Using a time-series methodology, we...