We analyze the way in which Latin American countries have adjusted to commodityterms of trade (CTOT) shocks in the 1970-2007 period. Specifically, we investigate the degreeto which the active management of international reserves and exchange rates impacted thetransmission of international price...

This paper studies the cross-country variation of the fiscal stimulus and the exchange rate adjustmentpropagated by the global crisis of 2008-9, identifying the role of economic structure in accounting for theheterogeneity of response. We find that greater de facto fiscal space prior to the...

Developing Asia experienced a sharp surge in foreign currency reserves prior to the 2008-9 crisis.The global crisis has been associated with an unprecedented rise of swap agreements betweencentral banks of larger economies and their counterparts in smaller economies. We explorewhether such swap...

The end of the great moderation has profound implications on the assessment of fiscalsustainability. The pertinent issue goes beyond the increase in stock of public debt/GDP inducedby the global recession, to include the perspective that the sustainability of a given publicdebt/GDP depends on...

We examine the open macroeconomic policy choices of developing economies from the perspectiveof the economic “trilemma†hypothesis. We construct an index of divergence of the threetrilemma policy choices, and evaluate its patterns in recent decades. We find that the threedimensions of...

This paper analyzes reforms and adjustments in the context of the Euro and the global financialcrises. Taking the perspective of the evolutionary approach to institutions, the formation of a newcurrency area is not unidirectional. The process leading to the euro is an example of a commonupbeat...

The accumulated experience of emerging markets over the last two decades has laid bare thetenuous links between external financial integration and faster growth on the one hand and theproclivity of such integration to fuel costly crises on the other. These crises have not gonewithout learning....

In this paper, we explore the link between stress in the domestic financial sector and the capital flightfaced by countries in the 2008-9 global crisis. Both the timing of emergence of internal financial stress indeveloping economies, and the size of the peak-trough declines in the stock price...

This paper evaluates how the global financial crisis emanating from theU.S. was transmitted to emerging markets. Our focus is on the extent thatthe crisis caused external market pressures (EMP), and whether theabsorption of the shock was mainly through exchange rate depreciation orthe loss of...