License to Spill: How Do We Discuss Spillovers in Article IV Staff Reports

IMF Working Papers, May 7, 2021

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Canonical URL: License to Spill: How Do We Discuss Spillovers in Article IV Staff Reports

Paper examines the Fund’s historical coverage of cross-border spillovers in its surveillance.
Scope: all IMF Article IV staff reports between 2010 and 2019.
Method: use of a state-of-the-art deep learning model to analyze discussion of spillovers.

Overall discussion of spillovers decreased over time.
Discussion of spillovers was pronounced in staff reports of some systemically important economies.
Spillover discussions were more pronounced during periods of global spillover events.
Spillover discussions were more prominent in staff reports covering advanced and emerging market economies.
Coverage of spillovers was higher in the context of the real, financial, and external sectors.
Countries more likely to discuss spillovers in their Article IV staff reports:
- countries with larger economies,
- countries with higher trade and capital account openess,
- countries with lower inflation.

Text analysis across Article IV staff reports for 2010–2019.
Applied a state-of-the-art deep learning model.
Relevant econometric/technical approaches referenced in metadata: Machine learning, Probit models, Econometric analysis.

Sectors with higher spillover coverage: real sector, financial sector, external sector.
Subject tags in the source: Balance of payments, Capital account, Econometric analysis, Economic sectors, Financial crises, Financial sector policy and analysis, Inflation, Machine learning, Prices, Probit models, Spillovers, Technology.