Common issues emerging from the recent experience with IMF-supported programs in Hungary, Poland, Czechoslovakia, Bulgaria, and Romania are analyzed. These comprise the initial price overshooting and output collapse and the financial and structural problems associated with bad loan portfolios...

This paper analyzes macroeconomic effects of projected population aging in industrial countries. The effects of population aging are examined with a theoretical model and simulations of the IMF’s multiregion econometric model (MULTIMOD). The study highlights that an older population will...

This paper analyzes some leading indicators of currency crises, and proposes a specific early warning system. This system involves monitoring the evolution of several indicators that tend to exhibit an unusual behavior in the periods preceding a crisis. When an indicator exceeds a certain...

This paper answers key questions in considering a value-added tax (VAT) for Central and Eastern European countries. The paper emphasizes that in Western countries tax policy derives from the assumption that the market achieves an optimal allocation of resources. Efficiency in resource allocation...

This paper describes that publications of the IMF are one way in which this responsibility is discharged. Through the publication of Staff Papers, the IMF is making available some of the work of members of its staff. The IMF believes that these papers will be found helpful by government...

This paper analyzes long-term exchange rate modeling. The paper reviews the literature that tests for a unit root in real exchange rates and the closely related work on testing for a unit root in the residual from a regression of the nominal exchange rate on relative prices. It argues that the...

This paper assesses alternative auction techniques for pricing and allocating various financial instruments, such as government securities, central bank refinance credit, and foreign exchange. Before recommending appropriate formats for auctioning these items, the paper discusses basic auction...

This paper tests uncovered interest parity (UIP) using interest rates on longer maturity bonds for the Group of Seven countries. These long-horizon regressions yield much more support for UIP—all of the coefficients on interest differentials are of the correct sign, and almost all are closer...

This paper discusses the origins of the pyramid schemes and the way the authorities handled them. The paper analyzes the economic effects of the pyramid schemes, concluding that despite the descent into anarchy triggered by the schemes’ collapse, their direct effects on the economy are...

Trade liberalization in developing countries is frequently opposed on the grounds that, because it is likely to cause a deterioration in the external balance, it may not be a viable policy option for countries facing foreign exchange constraints. Recent literature suggests, however, an ambiguous...