/external/pubs/cat/createx/Publications.aspx?page=sdnStaff Discussion Notes showcase the latest policy-related analysis and research being developed by individual IMF staff and are published to elicit comment and to further debate. These papers are generally brief and written in nontechnical language, and so are aimed at a broad audience interested in economic policy issues.Imf.Org RSS Feed GeneratorENhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=40526The U.S., the U.K., and more recently, the E.U., have proposed policy measures directly targeting complexity and business structures of banks. Unlike other, price-based reforms (e.g., Basel 3 and G-SIFI surcharges), these proposals have been developed unilaterally with material differences in scope, design and implementation schedules. This may exacerbate cross-border regulatory arbitrage and put a further burden on consolidated supervision and cross-border resolution. This paper provides an analysis of the potential implications of implementing different structural policy measures. It proposes a pragmatic and coordinated approach to development of these policies to reduce risk of regulatory arbitrage and minimize unintended consequences. In doing so, it also aims to identify a set of common policy measures that countries could adopt to re-scope bank business models and corporate structures.14 May 2013 09:00:00 ESTStaff Discussionhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=40526http://www.imf.org/external/pubs/cat/longres.aspx?sk=40477This note explores how the economic thinking about macroeconomic management has evolved since the crisis began. It discusses developments in monetary policy, including unconventional measures; the challenges associated with increased public debt; and the policy potential, risks, and institutional challenges associated with new macroprudential measures. Rationale: The note contributes to the ongoing debate on several aspects of macroeconomic policy. It follows up on the earlier “Rethinking” paper, refining the analysis in light of the events of the past two years. Given the relatively fluid state of the debate (e.g., recent challenges to central bank independence), it is useful to highlight that while many of the tenets of the pre-crisis consensus have been challenged, others (such as the desirability of central bank independence) remain valid.15 Apr 2013 09:00:00 ESTStaff Discussionhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=40477http://www.imf.org/external/pubs/cat/longres.aspx?sk=40412This paper does two things. First, it articulates what are the main implications of theoretical and empirical research for design of labor market policies and labor market institutions. Second, in this light, the paper analyzes the IMF’s labor market recommendations since the beginning of the crisis, both in general, and more specifically in program countries29 Mar 2013 09:00:00 ESTStaff Discussionhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=40412http://www.imf.org/external/pubs/cat/longres.aspx?sk=40317The SDN elaborates the case for, and the design of, a banking union for the euro area. It discusses the benefits and costs of a banking union, presents a steady state view of the banking union, elaborates difficult transition issues, and briefly discusses broader EU issues. As such, it assesses current plans and provides advice. It is accompanied by three background technical notes that analyze in depth the various elements of the banking union: a single supervisory framework; a single resolution and common safety net; and urgent issues related to repair of weak banks in Europe.12 Feb 2013 09:00:00 ESTStaff Discussionhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=40317http://www.imf.org/external/pubs/cat/longres.aspx?sk=40166Limited diversification is an underlying characteristic of many low-income countries (LICs). Concentration in sectors with limited scope for increases in productivity and quality may result in less broad-based and sustainable growth. Moreover, lack of diversification may increase exposure to adverse external shocks and macroeconomic instability. The SDN will have three objectives. First, to review and extend the evidence, from the existing literature and ongoing IMF work, that points to diversification as a crucial aspect of the development process. A major focus will be on cross-country and cross-regional differences in the pace of diversification. Second, to draw lessons from the experiences of those countries that have successfully diversified their economies. Third, to analyze the relationship between diversification, growth, and volatility.14 Dec 2012 09:00:00 ESTStaff Discussionhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=40166http://www.imf.org/external/pubs/cat/longres.aspx?sk=40132This note outlines the basic economics of the shadow banking system, highlights (systemic) risks related to it, and suggests implications for measurement and regulatory approaches.04 Dec 2012 09:00:00 ESTStaff Discussionhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=40132http://www.imf.org/external/pubs/cat/longres.aspx?sk=40024 Income inequality has increased in most advanced and many developing economies over recent decades, reflecting a range of factors including globalization and technological change. Even more striking is the large variation in average disposable (post-tax-and-transfer) income inequality across regions, much of which can be accounted for by differences in the level and progressivity of tax and spending policies. In advanced economies, fiscal policy has played a significant role in reducing income inequality, especially on the expenditure side but also through progressive income taxation. However, reforms since the mid-1990s have lessened the generosity of social benefits and the progressivity of income tax systems in these economies making fiscal policy less redistributive. This is a revised version of SDN/12/08 (published on June 28, 2012), which incorporates updated data on international Gini coefficients. Figure 1, Table 1, and Appendix Table 1 have been updated to include the new data. 27 Sep 2012 09:00:00 ESTStaff Discussionhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=40024http://www.imf.org/external/pubs/cat/longres.aspx?sk=26231To assess the overall impact of the financial regulatory initiatives on U.S., European, and Japanese financial institutions and their respective economies. It will examine the existing analyses on the impact of the regulatory initiatives by the financial industry (financial analysts, industry associations, and consulting companies) and the official sector and supplements them with Basel III disclosures by financial institutions to estimate the overall impact of the regulatory reforms and reach some overall conclusions. The assessment takes into account how financial institutions respond to the combined effects of the regulatory measures by adapting their business models to a new set of capital regulations, shrinking their balance sheet, changing its structure (funding and asset composition) , cutting costs, and charging more for loans. Indeed, one of the most important conclusions is that any increase in lending rates will be minor.11 Sep 2012 09:00:00 ESTStaff Discussionhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=26231http://www.imf.org/external/pubs/cat/longres.aspx?sk=26231To assess the overall impact of the financial regulatory initiatives on U.S., European, and Japanese financial institutions and their respective economies. It will examine the existing analyses on the impact of the regulatory initiatives by the financial industry (financial analysts, industry associations, and consulting companies) and the official sector and supplements them with Basel III disclosures by financial institutions to estimate the overall impact of the regulatory reforms and reach some overall conclusions. The assessment takes into account how financial institutions respond to the combined effects of the regulatory measures by adapting their business models to a new set of capital regulations, shrinking their balance sheet, changing its structure (funding and asset composition) , cutting costs, and charging more for loans. Indeed, one of the most important conclusions is that any increase in lending rates will be minor.11 Sep 2012 09:00:00 ESTStaff Discussionhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=26231http://www.imf.org/external/pubs/cat/longres.aspx?sk=26239The financial crisis has again brought home the profound financial linkages across countries, often manifest in highly volatile capital flows. This volatility has prompted interest in possible rules of the road to guide policies in both source and recipient countries. This note discusses the analytical underpinnings, and possible contours, of such rules. While a series of discussion notes have investigated how an individual country might respond to surging inflows, less attention has been paid to the multilateral consequences of country policies, and the desirability of international cooperation to achieve globally efficient outcomes. We argue that the global welfare implications of capital account regulations, or policies that mimic the effects of such regulations, are threefold. First, spillovers from such policies do not necessarily have normative implications: if policies are justified from a national standpoint (in terms of reducing domestic distortions), under a range of conditions they should be pursued even if they give rise to cross-border spillovers. Second, however, if policies in one country exacerbate existing distortions in other countries, and it is costly for other countries to respond, then multilateral restrictions on unilateral policies are likely to be beneficial. Third, coordination may require borrowers to reduce inflow controls or, much thornier, agreement by source countries to partially internalize risks from excessively large or risky outflows. While it is very difficult to fully spell out desirable rules of the road in practice, multilateral oversight should carefully consider situations where capital account regulations seem unjustified from a prudential standpoint and seem instead geared toward vitiating external adjustment—e.g., when inflow controls are used to sustain an undervalued currency. Oversight might also raise red flags in situations where policies are excessively deflecting flows across recipient countries or transmitting risk from source to recipient countries. The discussion note fleshes out the analytical considerations behind such rules.07 Sep 2012 09:00:00 ESTStaff Discussionhttp://www.imf.org/external/pubs/cat/longres.aspx?sk=26239