/external/pubs/cat/shortres.aspx?TITLE=&auth_ed=&subject=&ser_note=Policy%20Discussion&daThis series comprises staff studies in the area of policy design and research. The papers are normally prepared in nontechnical language, and aimed primarily at operational staff involved in mission work and persons outside the IMF interested in policy issues.Imf.Org RSS Feed GeneratorENhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=22171Policy Discussion Paper No. 08/301 Jul 2008 09:00:00 ESTPolicy Discussionhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=22171http://www.imf.org/external/pubs/cat/longres.aspx?sk=22007Although capital inflows are generally beneficial to recipient countries, they also pose a challenge for the conduct of economic policy. This paper proposes a conceptual taxonomy to guide the design of policy responses in the face of capital flows. We explore how responses to capital surges should be differentiated based on the source of balance of payments pressures. We also examine whether the policy choices in emerging market countries conform to the taxonomy's predictions and find some correspondence, especially during periods of high global liquidity.01 Jun 2008 09:00:00 ESTPolicy Discussionhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=22007http://www.imf.org/external/pubs/cat/longres.aspx?sk=21921This paper assesses the proposal, publicly debated in recent years in Italy, to reduce public debt by selling public assets, especially nonfinancial tangible assets. The main findings indicate that, although selling public assets has some merit if done to make more productive use of them, practical complications abound. Moreover, such sales might weaken underlying fiscal discipline. Other heavily indebted countries have reduced their debt much more than Italy without heavy recourse to extraordinary sales. In this context, the case of Belgium is of particular interest. Weighing the trade-offs, if properly and transparently done, the sale of public assets can complement, to a limited extent, fiscal consolidation, but should not be considered as an alternative to it.01 May 2008 09:00:00 ESTPolicy Discussionhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=21921http://www.imf.org/external/pubs/cat/longres.aspx?sk=21171Australia has enjoyed fifteen years of uninterrupted economic expansion since 1992 despite shocks such as the Asian crisis in 1997-98 and the information technology bust in 2000-01. This resilient economic performance owes much to wide-ranging structural reforms and the improved frameworks for monetary and fiscal policies that were implemented after the Australian dollar was floated in 1983. In addition to gaining the expected macroeconomic benefits from exchange rate flexibility, the float appeared to help motivate and facilitate the subsequent reforms. Australia's experience with adapting to a floating currency may therefore be of broader interest.01 Jul 2007 09:00:00 ESTPolicy Discussionhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=21171http://www.imf.org/external/pubs/cat/longres.aspx?sk=20652Welfare states can be reformed successfully, and popular support for reforms can be maintained. But this requires an internally consistent package of labor market, fiscal, and product market reforms, including some kind of buy-in, through, for example, tax cuts. Empirical analysis combined with a select number of case studies-comprising Ireland, Denmark, the Netherlands, and the United Kingdom-reveals that successful reformers focused on increasing labor supply through benefit reform, lowering tax wedges, and lowering government consumption. At the same time, greater labor supply translated into employment growth more effectively in the presence of liberal labor and product markets.01 May 2007 09:00:00 ESTPolicy Discussionhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=20652http://www.imf.org/external/pubs/cat/longres.aspx?sk=19398The current round of multilateral trade negotiations-the Doha Round-presents an opportunity for countries to reap the benefits of trade liberalization. Unfortunately, a number of misconceptions about the likely impact of trade reforms has, in part, impeded more rapid progress toward completion of the Round. This paper addresses some of the most egregious of these misconceptions and presents results from IMF research that sheds light on these issues. In particular, this paper argues that: (i) developing countries have much to gain from their own trade liberalization; (ii) preference erosion could be significant for some countries, but it is not a justification for postponing tariff reductions; (iii) tariffs applied against agricultural products in rich countries actually harm developing countries more than subsidies; and (iv) a disproportionate share of agricultural subsidies in rich countries goes to large wealthy farmers.01 Aug 2006 09:00:00 ESTPolicy Discussionhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=19398http://www.imf.org/external/pubs/cat/longres.aspx?sk=18918There has been a growing recognition of the importance of transparency for economic growth and social development in oil producing countries. This paper analyzes transparency issues in Cameroon's oil sector. It shows that, while substantial efforts have already been undertaken, continued action is necessary to strengthen transparency. The paper seeks to identify why and how transparency, especially in the fiscal area, matters for economic development and poverty reduction in Cameroon.01 Mar 2006 09:00:00 ESTPolicy Discussionhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=18918http://www.imf.org/external/pubs/cat/longres.aspx?sk=18848China has achieved tremendous economic progress in the last three decades, but there is much work to be done to make the economy resilient to large shocks, ensure the sustainability of its growth, and translate this growth into corresponding improvements in the economic welfare of its citizens. We discuss the complex challenges that Chinese policymakers face in striking the right balance in terms of speed and coordination of reforms. We argue that China's current stage of development, along with its rising market orientation and increasing integration with the world economy, may make the incremental and piecemeal approaches to reforms increasingly untenable and, in some cases, could even generate risks of their own. The present favorable domestic and external circumstances provide an excellent window of opportunity for bolder reforms and for tackling some deep-rooted problems without causing much economic disruption.01 Mar 2006 09:00:00 ESTPolicy Discussionhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=18848http://www.imf.org/external/pubs/cat/longres.aspx?sk=18757While a number of emerging market crises were characterized by widespread contagion during the 1990s, more recent crises (notably, in Argentina) have been mostly contained within national borders. This has led some observers to wonder whether contagion might have become a feature of the past, with markets now better discriminating between countries with good and bad fundamentals. This paper argues that a prudent working assumption is that contagion has not vanished permanently. Available data do not seem to point to a disappearance of the main channels that contribute to transmitting crises across countries. Moreover, anticipation of the Argentine crisis by international investors may help explain the recent absence of contagion.01 Jan 2006 09:00:00 ESTPolicy Discussionhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=18757http://www.imf.org/external/pubs/cat/longres.aspx?sk=18740Assessments regarding the effectiveness of sovereign debt restructurings are often summarized by comparisons of the net present value of debt service before and after the restructuring. These calculations are inherently sensitive to the choice of discount rate. This paper explores issues that arise in selecting discount rates when evaluating sovereign debt restructurings. It suggests using a range of discount rates and centering the analysis around the internal rate of return to assess whether the debt restructuring has generated net present value savings or costs to the debtor.01 Dec 2005 09:00:00 ESTPolicy Discussionhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=18740