/external/pubs/cat/shortres.aspx?TITLE=&auth_ed=&subject=&ser_note=Occasional+Paper&datecThis series contains studies on a variety of economic and financial subjects of importance to the work of the IMF. Although the emphasis is on current topics, the series also includes papers on subjects of longer-term interest.Imf.Org RSS Feed GeneratorENhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=24244Assessments of exchange rate misalignments and external imbalances for low-income countries are challenging because methodologies developed for advanced and emerging economies cannot be automatically applied to poorer nations. This paper uses a large database, unique in the set of indicators and number of countries it covers, to estimate the relationship in low-income countries between a set of fundamentals in the medium to long term and the real effective exchange rate, the current account, and the net external assets position.15 Mar 2011 09:00:00 ESTOccasional Paperhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=24244http://www.imf.org/external/pubs/cat/longres.aspx?sk=23407The member countries of the International Monetary Fund collaborate to try to assure orderly exchange arrangements and promote a stable system of exchange rates, recognizing that the essential purpose of the international monetary system is to facilitate the exchange of goods, services, and capital, and to sustain sound economic growth. The paper reviews the stability of the overall system of exchange rates by examining macroeconomic performance (inflation, growth, crises) under alternative exchange rate regimes; implications of exchange rate regime choice for interaction with the rest of the system (external adjustment, trade integration, capital flows); and potential sources of stress to the international monetary system.15 Mar 2011 09:00:00 ESTOccasional Paperhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=23407http://www.imf.org/external/pubs/cat/longres.aspx?sk=23731The question of what makes fiscal decentralization work is faced by many policymakers around the world. This book draws on both the relevant literature and policy and technical advice provided by the IMF to a wide range of member countries, and discusses the key factors that help make decentralization sustainable, efficient, and equitable from a macroeconomic perspective. It focuses on institutional reforms (in the revenue and expenditure assignments to different levels of government, the design of intergovernmental transfers, and public financial management systems) that are suited to different countries' circumstances, and their appropriate sequencing.06 Oct 2010 09:00:00 ESTOccasional Paperhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=23731http://www.imf.org/external/pubs/cat/longres.aspx?sk=22479This paper explores the role of exchange rates in emerging economies with inflation-targeting regimes, an issue that has become especially germane during the current episode of financial turmoil and volatile capital flows. Under inflation targeting, the interest rate is the main monetary policy tool for influencing activity and inflation, and there is little agreement about the appropriate role of the exchange rate.The exchange rate is a more important monetary policy tool for emerging economies that have adopted inflation targeting than it is for inflation-targeting advanced economies. Inflation-targeting emerging economies generally have less flexible exchange rate arrangements and intervene more frequently in the foreign exchange market than their advanced economy counterparts. The enhanced role of the exchange rate reflects these economies' greater vulnerability to exchange rate shocks and their less developed financial markets. However, their sharper focus on the exchange rate may cause some confusion about the commitment of their central banks to achieve the inflation target and may also complicate policy implementation. Global inflation pressures, greater exchange rate volatility, and the financial stresses from the global financial turmoil that began in mid-2007 are heightening these tensions.24 Nov 2009 09:00:00 ESTOccasional Paperhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=22479http://www.imf.org/external/pubs/cat/longres.aspx?sk=22594This volume examines the impact on economic performance of structural policies-policies that increase the role of market forces and competition in the economy, while maintaining appropriate regulatory frameworks. The results reflect a new dataset covering reforms of domestic product markets, international trade, the domestic financial sector, and the external capital account, in 91 developed and developing countries. Among the key results of this study, the authors find that real and financial reforms (and, in particular, domestic financial liberalization, trade liberalization, and agricultural liberalization) boost income growth. However, growth effects differ significantly across alternative reform sequencing strategies: a trade-before-capital-account strategy achieves better outcomes than the reverse, or even than a "big bang"; also, liberalizing the domestic financial sector together with the external capital account is growth-enhancing, provided the economy is relatively open to international trade. Finally, relatively liberalized domestic financial sectors enhance the economy's resilience, reducing output costs from adverse terms-of-trade and interest-rate shocks; increased credit availability is one of the key mechanisms.15 Oct 2009 09:00:00 ESTOccasional Paperhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=22594http://www.imf.org/external/pubs/cat/longres.aspx?sk=22848The economic and financial crisis is affecting the fiscal accounts of virtually every country. Public sector support for the financial system, fiscal stimulus and the automatic stabilizers, as well as the revenue decline from the downturn in commodity and asset prices, are leading to sharp increases in deficits and debt stocks around the world. Expansionary fiscal policy continues to be necessary in the short term to stimulate economic recovery. But it is now essential that governments reassess the state of their public finances in light of the global crisis and adopt strategies that will ensure medium- and long-term fiscal sustainability. Many of the advanced economies most affected by the crisis are also those where age-related spending will increase markedly in the coming years, adding particular urgency to the need to identify medium-term consolidation strategies. This new paper, which focuses mainly on advanced and emerging market economies, employs projections based on the April 2009 World Economic Outlook to quantify the fiscal implications of the crisis for a cross-section of countries. The authors assess the post-shock fiscal balances and debt outlook, and suggest ways for governments to clarify their strategies for maintaining fiscal solvency.18 Sep 2009 09:00:00 ESTOccasional Paperhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=22848http://www.imf.org/external/pubs/cat/longres.aspx?sk=21531Low-income countries continue to face significant challenges in meeting their vast development needs while maintaining a sustainable debt position, even after many of these countries have benefited from substantial debt relief. These challenges are further exacerbated by changes in the financial landscape, including the emergence of new creditors and investors, the use of more complex financing vehicles, and the development of domestic markets. The joint World Bank/IMF debt sustainability framework is well placed to help address these challenges and reduce the risks of renewed episodes of debt distress. This paper explains the analytical underpinnings of the framework and the means to ensure its full effectiveness.25 Feb 2009 09:00:00 ESTOccasional Paperhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=21531http://www.imf.org/external/pubs/cat/longres.aspx?sk=22247This paper surveys the foreign exchange markets, money and secondary government security markets, and stock exchanges in 107 smaller economy countries. The underdevelopment of these markets impedes risk transfer, monetary policy, corporate financing, and the capacity to absorb capital inflows. This study marks a first step toward formulating policies to develop essential smaller economy financial markets by documenting the stylized facts and presenting a framework for assessing the policy issues.16 Dec 2008 09:00:00 ESTOccasional Paperhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=22247http://www.imf.org/external/pubs/cat/longres.aspx?sk=21761Uruguay has experienced a remarkable recovery since the 2002 crisis, supported by sound policies and favorable external conditions. With the framework put in place in 2002, Uruguay abandoned an exchange rate peg in favor of a free float, adoped a monetary regime initially based on money targets, improved financial prudential norms and supervision, and accumulated significant central bank reserves. Against this background, Uruguay now faces issues beyond those addressed to stabilize the economy. As the country pursues key postcrisis monetary and financial reforms, the analysis provided in this paper has a direct bearing on the ongoing efforts to move toward a fully fledged inflation-targeting regime and develop interest rates as monetary instruments, as well as on the preparedness of the financial system to deal with shocks, and the adequacy of current central bank reserves.25 Jul 2008 09:00:00 ESTOccasional Paperhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=21761http://www.imf.org/external/pubs/cat/longres.aspx?sk=21645This paper examines the various roles of IMF financing in crisis prevention. Emerging market economies that experienced financial crises in the past have been subject to enormous economic and social costs, highlighting the importance of crisis prevention. While the main defense against a crisis lies in a country’s own policies and institutional framework, the IMF can contribute to these efforts through its surveillance activities, provision of technical assistance, and promotion of standards and codes. But the IMF may be able to contribute to crisis prevention more directly by providing contingent financial support. This paper explores the theoretical basis of, and empirical evidence for, possible “crisis prevention programs.”16 May 2008 09:00:00 ESTOccasional Paperhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=21645