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A quarterly magazine of the IMF
|A Single Currency for Africa?
Paul Masson and Catherine Pattillo
The goal of a common currency has long been a pillar
of African unity but is it in Africa's best interests? Drawing on their
recently published book, The Monetary Geography of Africa, Masson
and Pattillo conclude that a full African monetary union spanning the
continent is neither feasible nor desirable, but selective expansions
of Africa's two existing monetary unions-the CFA franc zone in West and
Central Africa and the CMA in Southern Africa-could be feasible.Combined
with stringent entrance criteria, and linked to the New Partnership for
Africa's Development, this strategy could provide a strong incentive for
(404 kb, pdf file)
Learning from Success
Martin Ravallion and Shaohua Chen
China has made huge strides in its battle against poverty over the past
25 years, providing a number of lessons for other developing countries trying to improve living standards. What has worked well in China and why has the problem of inequality become a looming problem?
(140 kb, pdf file)
From Fixed to Float:
Fear No More
Cem Karacadag, Rupa Duttagupta, Gilda Fernandez, and Shogo Ishii
The nuts and bolts of how countries can move to a
floating exchange rate. Article summarizes key operational and policy
issues for countries that have decided to adopt market-determined exchange
(136 kb, pdf file)
What If . . . ?
Paul Hilbers and Matthew T. Jones
Stress tests-the use of different scenarios to determine
how vulnerable countries' financial systems are to shocks-are increasingly
becoming part of the IMF's regular surveillance of member countries' economies.
(129 kb, pdf file)
for Public Investment
Richard Hemming and
The IMF has been criticized for holding back public
investment in Latin America and elsewhere. Should it change its rather
stringent rules for fiscal accounting? Changes that go too far run the
risk of opening a pandora's box of creative accounting, the authors say,
but there is scope to help countries make more room for public investment.
(153 kb, pdf file)
Mary Amiti and Shang-Jin Wei
Although service outsourcing is growing rapidly, it
remains a small fraction of industrial countries' GDP. And, despite fears
to the contrary, studies show that jobs are not being exported, on net,
from industrial countries to developing countries as a result of outsourcing.
(137 kb, pdf file)
Look Before You Leap
Anwar Shah and Mark Schacter
A lack of progress in eradicating corruption could be due
to misguided strategies. Experience strongly suggests that the best way
to tackle corruption is through an indirect approach that starts with the
(107 kb, pdf file)
Taking the Plunge Without Getting Hurt
M. Ayhan Kose, Eswar S. Prasad, and Marco E. Terrones
An IMF study suggests that opening up to the global
economy could help developing countries cope with the adverse effects
of volatility on growth.
(126 kb, pdf file)
Calculating the Benefits of Debt Relief
Rina Bhattacharya and
High levels of debt can depress economic growth in
low-income countries, but only after it reaches a certain threshold.
Cutting debt service obligations can provide breathing space for raising
(97 kb, pdf file)
Letter from the Editor
(59 kb, pdf file)
News from international agencies
Battling the AIDS pandemic; On the ball; UN spotlights
child hunger deaths; Babies and bosses.
(91 kb, pdf file)
People in Economics
In On The Ground Floor
Profile of Linah Mohohlo, the award-winning central bank governor of Botswana,
who talks about one of Africa's best-performing economies. While Mohohlo's achievements
in managing Botswana's monetary policy would seem impressive enough by any gauge,
Mohohlo also has an active role in the private sector, sitting on the boards
of several major companies. She is also a member of the Commission for Africa-set
up earlier this year to push for action in the international community on issues
such as development aid, fair trade, and debt relief.
(109 kb, pdf file)
Back to Basics
Pedantry or Prudence: How Does the IMF Account for Grants and Loans?
Examines how the IMF accounts for grants and concessional
loans in a country's budget, not only in terms of how they affect
the fiscal balance but, more importantly, in assessing fiscal policy.
(76 kb, pdf file)
Agricultural Trade: Reaping a Rich Harvest from Doha
Focuses on how the Doha trade negotiations can benefit trade in agricultural products. Highlights the fact that trade barriers to agricultural products coupled with subsidies, particularly in the richest countries, prevent the poorer ones from maximizing the gains they could reap from agricultural trade. Charts illustrate the extent of agricultural protection, tariff rates on raw materials, the level of export subsidies, and estimates of the impact (largely beneficial) of global trade liberalization.
(293 kb, pdf file)
The Shackled Continent: Power, Corruption, and African Lives, Robert Guest
The Battle for Zimbabwe, Geoff Hill
India's Emerging Economy: Performance and Prospects in the
1990s and Beyond, Kaushik Basu (editor)
Engaging India: Diplomacy, Democracy, and the Bomb, Strobe Talbott
IMF Essays From a Time of Crisis: The International Financial System, Stabilization, and Development, Stanley Fischer
(96 kb, pdf file)
Odious or Just Malodorous
While the proposal to declare debt accumulated
under dictatorships as odious is well motivated, one does not
need conspiracy theories to explain why the idea has not got anywhere,
nor why newly legitimate governments have accepted responsibility
for servicing the potentially odious debts they inherited.
(64 kb, pdf file)
Disciplined macroeconomic policies, greater international
competitiveness, and progress with structural reforms have reduced
Brazil's vulnerabilites in recent years, but major challenges
(65 kb, pdf file)
Articles published in 2004
(61 kb, pdf file)