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A quarterly magazine of the IMF
  June 2003
Volume 40, Number 2
Inflation—Too high, too low, or just right?
Inflation—Finding the Right Balance
The problem of inflation is as old as money itself, but both inflation and its opposite, deflation, pose special challenges for today's policymakers. (126 kb, pdf file)

Beating Inflation
The importance of luck, timing, and political institutions

A. Javier Hamann and Alessandro Prati
Many disinflation attempts fail. Whether or not a country's stabilization program succeeds often depends on luck, timing, and political institutions. (80 kb, pdf file)

The new threat?

Manmohan S. Kumar
As inflation rates decline worldwide, concerns about deflation are rising. Although the risks of generalized global deflation remain small, it is important to implement preemptive policies to prevent deflation setting in. (97 kb, pdf file)

The Realities of Modern Hyperinflation
Despite falling inflation rates worldwide, hyperinflation could happen again

Carmen M. Reinhart and Miguel A. Savastano
The authors recall seven lessons from modern hyperinflations. (57 kb, pdf file)

Institutions in Development
Root Causes
A historical approach to assessing the role of institutions in economic development

Daron Acemoglu
A look at the impact the different types of institutions established by Europeans in their colonies had on subsequent economic development, and the implications for development today. (88 kb, pdf file)

The Primacy of Institutions
(and what this does and does not mean)

Dani Rodrik and Arvind Subramanian
The authors come up with some striking results about the importance of institutions that have broad implications for development and lending conditionality. (87 kb, pdf file)

Testing the Links
How strong are the links between institutional quality and economic performance?

Hali Edison
A study of the links between institutional quality and economic performance analyzes the degree to which sound institutions affect development, growth, and the volatility of growth. (57 kb, pdf file)

Institutions Matter, but Not for Everything
The role of geography and resource endowments in development shouldn’t be underestimated

Jeffrey D. Sachs
The role of geography and resources in development shouldn’t be underestimated; poor countries need special help to overcome development obstacles, says the UN Secretary-General's special advisor on the UN Millennium Development Goals. (107 kb, pdf file)

Institutions Needed for More than Growth
By facilitating the management of environmental and social assets, institutions underpin sustainable development

Christian Eigen-Zucchi, Gunnar S. Eskeland, and Zmarak Shalizi

Also in This Issue

Dancing in Unison?
Economists lack evidence of increasing synchronization of the world’s economies

Robin Brooks, Kristin Forbes, Jean Imbs, and Ashoka Mody
Globalization is increasing the links between the world’s economies, but this does not mean they are becoming synchronized. (64 kb, pdf file)


From the Editor

Letters to the Editor
Fred Bergsten debates Kenneth Rogoff's opposition to coordinating G-3 exchange rate regimes. (36 kb, pdf file)

In Brief

News from international agencies
News from international agencies, including growing acceptance of collective action clauses in sovereign bond issues, and the IMF's recent move to step up technical assistance to Africa. (55 kb, pdf file)

People in Economics

Concentrating the Mind
Jeremy Clift interviews Professor Allan H. Meltzer on why the international financial system remains accident prone, how the IMF has changed, and how he became an icon of American economics. (143 kb, pdf file)

Back to Basics

The move to inflation targeting
Why targeting a specified inflation rate has become increasingly popular with central banks. (41 kb, pdf file)

Picture This

Plunging into crisis
Freshwater resources come under increasing pressure. Growing water shortages and water pollution in developing and developed countries alike have plunged the world into a freshwater crisis. (875 kb, pdf file)

Country Focus

A snapshot of Japan's economy:
A tale of stubborn deflation and weak growth, illustrated with graphs. (80 kb, pdf file)

Straight Talk

Unlocking Growth in Africa
Kenneth S. Rogoff argues that aid is desperately needed for humanitarian purposes, but it cannot be the engine of growth. (36 kb, pdf file)

Book Reviews

Imagine There's No Country—Poverty, Inequality and Growth in the Era of Globalization, Surjit Bhalla
Holding the State to Account, Samuel Paul
Banking on Death, or Investing in Life Robin Blackburn
Asset Price Bubbles William C. Hunter, George G. Kaufman, and Michael Pomerleano (editors) (79 kb, pdf file)