Description : The integration of financial markets around the world over the past decade has posed new challenges for policymakers. The speed with which money can be switched in and out of currencies and countries has increased with the efficiency of global communications, considerably shortening the time policymakers have to respond to emerging crises. This pamphlet takes alook at attempts by economists to predict crises by developing early warning systems to signal when trouble may be brewing in currency markets and banking systems.
Description : Examines the role of the shadow, or underground, economy. Looks at ways of measuring it, the relationship between the shadow economy and the main stream economy, why it has been growing in size, and its effects on overall economic growth. How can states limit the size of the shadow economy, and does it matter that it exists?
Description : Spurred by advances in information and computer technologies, financial liberalization and innovation took off inthe late 1970s. Although the changes in financial markets have been beneficial overall, our understanding of the new risks to financial stability lags behind, as demonstrated by the financial crises of the past couple of decades. The study of international financial stability - a public good - is still in its infancy. This pamphlet, aimed at stimulating further debate on the subject, proposes a definition of financial stability and a broad framework for safeguarding it without inhibiting its dynamic development or limiting its benefits.
Description : Policymakers are often reluctant to grant independence to the agencies that regulate and supervise the financial sector because of the fear that these agencies, with their wide-ranging responsibilities and powers, could become a law unto themselves. This pamphlet describes mechanisms for making regulatory agencies accountable not only to the government but also to the industry they supervise and the public at large, with examples from a range of countries.
Description : In nearly every major financial crisis of the past decade-from East Asia to Russia, Turkey, and Latin America-political interference in financial sector regulation helped make a bad situation worse. Political pressures not only weakened financial regulation, but also hindered regulators and supervisors from taking action against troubled banks. This paper investigates why, to fulfill their mandate to preserve financial sector stability, financial sector regulators and supervisors need to be independent-from the financial services industry as well as from the government-as well as accountable.
Description : This article provides a brief overview of the latest research on the ability of forecasters to predict recessions. Few recessions have been forecast before their onset. Forecasters tend to be excessively cautious and do not revise their forecasts promptly and sufficiently to reflect incoming news. Nor do they fully take into account interdependence among economies. There is also a tendency for “groupthink” among forecasters, preventing them from giving due weight to their individual priors.
Description : IMF Managing Director Horst Köhler has recommended for Executive Board approval a transitional program for Argentina. the IMF said that while providing no net new financing, the arrangement would provide financial support and an extension of payment expectations to the IMF through August 2003. the Executive Board is expected to review the transitional program in the coming days.
Description : The IMF Research Bulletin, a quarterly publication, selectively summarizes research and analytical work done by various departments at the IMF, and also provides a listing of research documents and other research-related activities, including conferences and seminars. The Bulletin is intended to serve as a summary guide to research done at the IMF on various topics, and to provide a better perspective on the analytical underpinnings of the IMF’s operational work.
Description : Like all of us, though few so visibly, Alan Greenspan was forced by the financial crisis of 2008 to question some fundamental assumptions about risk management and economic forecasting. No one with any meaningful role in economic decision making in the world saw beforehand the storm for what it was. How had our models so utterly failed us? To answer this question, Alan Greenspan embarked on a rigorous and far-reaching multiyear examination of how Homo economicus predicts the economic future, and how it can predict it better. Economic risk is a fact of life in every realm, from home to business to government at all levels. Whether we’re conscious of it or not, we make wagers on the future virtually every day, one way or another. Very often, however, we’re steering by out-of-date maps, when we’re not driven by factors entirely beyond our conscious control. The Map and the Territory is nothing less than an effort to update our forecasting conceptual grid. It integrates the history of economic prediction, the new work of behavioral economists, and the fruits of the author’s own remarkable career to offer a thrillingly lucid and empirically based grounding in what we can know about economic forecasting and what we can’t.The book explores how culture is and isn't destiny and probes what we can predict about the world's biggest looming challenges, from debt and the reform of the welfare state to natural disasters in an age of global warming. No map is the territory, but Greenspan’s approach, grounded in his trademark rigor, wisdom, and unprecedented context, ensures that this particular map will assist in safe journeys down many different roads, traveled by individuals, businesses, and the state.
Description : This paper attempts to predict the incidence of arrears to the International Monetary Fund (IMF) by modifying and applying two of the major early warning systems for currency crises: the "signals" approach proposed by Kaminsky, Lizondo, and Reinhart (1997) and the probit-based alternative developed by Berg and Pattillo (1998). The results, based on both in-sample and out-of-sample tests, appear encouraging. While the unique nature of IMF arrears poses some challenges, the models could be useful tools for identifying countries at high risk of incurring arrears to the IMF.