External Balance In Low Income Countries

Author : Mr.Thierry Tressel,Lone Engbo Christiansen,Mr.Alessandro Prati,Mr.Luca Antonio Ricci
Publisher : International Monetary Fund
Page : 54 pages
File Size : 46,8 Mb
Release : 2009-10-01
Category : Business & Economics
ISBN : 9781451873689

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External Balance in Low Income Countries by Mr.Thierry Tressel,Lone Engbo Christiansen,Mr.Alessandro Prati,Mr.Luca Antonio Ricci Pdf

This paper offers a coherent empirical analysis of the determinants of the real exchange rate, the current account, and the net foreign assets position in low income countries. The paper focuses on indicators specific to low income countries, such as the quality of policies and institutions, the special access to official external financing, and the role of shocks. In addition to more standard factors, we find that domestic financial liberalization is associated with higher current account balances and net foreign asset positions, while capital account liberalization is associated with lower current account balances and net foreign asset positions and with more appreciated real exchange rates. Negative exogenous shocks tend to raise (reduce) the current account in countries with closed (opened) capital accounts. Finally, foreign aid is progressively absorbed over time through net imports, and is associated with a more depreciated real exchange rate in the long-run.

Author : Anonim
Publisher : Unknown
Page : 52 pages
File Size : 54,9 Mb
Release : 2009
Category : Balance of payments
ISBN : OCLC:456671411

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External Balance in Low Income Countries by Anonim Pdf

This paper offers a coherent empirical analysis of the determinants of the real exchange rate, the current account, and the net foreign assets position in low income countries. The paper focuses on indicators specific to low income countries, such as the quality of policies and institutions, the special access to official external financing, and the role of shocks. In addition to more standard factors, we find that domestic financial liberalization is associated with higher current account balances and net foreign asset positions, while capital account liberalization is associated with lower current account balances and net foreign asset positions and with more appreciated real exchange rates. Negative exogenous shocks tend to raise (reduce) the current account in countries with closed (opened) capital accounts. Finally, foreign aid is progressively absorbed over time through net imports, and is associated with a more depreciated real exchange rate in the long-run.

Author : Mr.Alessandro Prati,Mr.Luca Antonio Ricci,Lone Engbo Christiansen,Mr.Stephen Tokarick,Mr.Thierry Tressel
Publisher : International Monetary Fund
Page : 72 pages
File Size : 55,6 Mb
Release : 2011-03-15
Category : Business & Economics
ISBN : 9781616350536

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External Performance in Low-Income Countries by Mr.Alessandro Prati,Mr.Luca Antonio Ricci,Lone Engbo Christiansen,Mr.Stephen Tokarick,Mr.Thierry Tressel Pdf

Assessments of exchange rate misalignments and external imbalances for low-income countries are challenging because methodologies developed for advanced and emerging economies cannot be automatically applied to poorer nations. This paper uses a large database, unique in the set of indicators and number of countries it covers, to estimate the relationship in low-income countries between a set of fundamentals in the medium to long term and the real effective exchange rate, the current account, and the net external assets position.

Author : Mr.Valerio Crispolti,Ms.Era Dabla-Norris,Mr.Jun Il Kim,Ms.Kazuko Shirono,Mr.George C. Tsibouris
Publisher : International Monetary Fund
Page : 78 pages
File Size : 40,9 Mb
Release : 2013-03-08
Category : Business & Economics
ISBN : 9781475554526

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Assessing Reserve Adequacy in Low-Income Countries by Mr.Valerio Crispolti,Ms.Era Dabla-Norris,Mr.Jun Il Kim,Ms.Kazuko Shirono,Mr.George C. Tsibouris Pdf

Low-income countries routinely experience exogenous disturbances—sharp swings in the terms of trade, export demand, natural disasters, and volatile financial flows—that contribute to higher volatility in aggregate output and consumption compared with other countries. Assessing Reserve Adequacy in Low-Income Countries presents the findings of an analysis of a range of external shocks faced by these countries, beginning with a discussion of the impact of external shocks on macroeconomic growth, volatility, and welfare. Although sound macroeconomic and prudential policy frameworks are the first line of defense for limiting vulnerability, international reserves constitute the main form of self-insurance against such shocks. The evidence suggests that low-income countries with reserve coverage above three months of imports were better able to smooth consumption and absorption in the face of external shocks compared with those with lower reserve holdings. The analysis also points to the importance of country characteristics and vulnerabilities in assessing reserve adequacy.

Author : Ms.Wenyi Shen,Ms.Susan S. Yang,Luis-Felipe Zanna
Publisher : International Monetary Fund
Page : 48 pages
File Size : 48,5 Mb
Release : 2015-12-30
Category : Business & Economics
ISBN : 9781513521343

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Government Spending Effects in Low-income Countries by Ms.Wenyi Shen,Ms.Susan S. Yang,Luis-Felipe Zanna Pdf

Despite the voluminous literature on fiscal policy, very few papers focus on low-income countries (LICs). This paper develops a new-Keynesian small open economy model to show, analytically and through simulations, that some of the prevalent features of LICs—different types of financing including aid, the marginal efficiency of public investment, and the degree of home bias—play a key role in determining the effects of fiscal policy and related multipliers in these countries. External financing like aid increases the resource envelope of the economy, mitigating the private sector crowding out effects of government spending and pushing up the output multiplier. The same external financing, however, tends to appreciate the real exchange rate and as a result, traded output can respond quite negatively, reducing the overall output multiplier. Although capital scarcity implies high returns to public capital in LICs, declines in public investment efficiency can substantially dampen the output multiplier. Since LICs often import substantial amounts of goods, public investment may not be as effective in stimulating domestic production in the short run.

Author : Mr.Atish R. Ghosh,Mr.Jonathan David Ostry
Publisher : International Monetary Fund
Page : 30 pages
File Size : 48,7 Mb
Release : 1994-01-01
Category : Business & Economics
ISBN : 9781451927726

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Export Instability and the External Balance in Developing Countries by Mr.Atish R. Ghosh,Mr.Jonathan David Ostry Pdf

Uncertainty about the export earnings accruing to a country (sometimes referred to as export instability) is an important source of macroeconomic uncertainty in many developing countries. Theory predicts that countries should react to increases in this form of uncertainty by increasing their level of savings. The resulting asset accumulations would then act as the country’s insurance against the greater riskiness in its income stream. The paper tests this implication for a large sample of developing countries. In general, the results suggest that developing countries have indeed responded to increases in export instability by building up precautionary savings balances.

Author : Atish R. Ghosh,Jonathan David Ostry
Publisher : Unknown
Page : 0 pages
File Size : 44,8 Mb
Release : 1994
Category : Electronic
ISBN : OCLC:481013291

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Export Instability and the External Balance in Developing Countries by Atish R. Ghosh,Jonathan David Ostry Pdf

Author : Raghbendra Jha
Publisher : Psychology Press
Page : 518 pages
File Size : 46,9 Mb
Release : 2003
Category : Business & Economics
ISBN : 0415262143

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Macroeconomics for Developing Countries by Raghbendra Jha Pdf

This updated edition develops the themes contained in the first edition, taking into account the changes that have occurred in the global economy since the turn of the millennium.

Author : Ms.Era Dabla-Norris,Yasemin Bal-Gunduz
Publisher : International Monetary Fund
Page : 42 pages
File Size : 40,5 Mb
Release : 2012-11-02
Category : Business & Economics
ISBN : 9781475548839

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Exogenous Shocks and Growth Crises in Low-Income Countries by Ms.Era Dabla-Norris,Yasemin Bal-Gunduz Pdf

This paper develops a new index which provides early warning signals of a growth crisis in the event of large external shocks in low-income countries. Multivariate regression analysis and a univariate signaling approach are used to map information from a parsimonious set of underlying policy, structural, and institutional indicators into a composite vulnerability index. The results show that vulnerabilities to a growth crisis in low-income countries declined significantly from their peaks in the early 1990s, but have risen in recent years as fiscal policy buffers were expended in the wake of the global financial crisis.

Author : Mr.Boileau Loko,Raj Nallari,Mr.Kadima D. Kalonji,Mr.Montfort Mlachila
Publisher : International Monetary Fund
Page : 27 pages
File Size : 41,9 Mb
Release : 2003-03-01
Category : Business & Economics
ISBN : 9781451848199

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The Impact of External Indebtednesson Poverty in Low-Income Countries by Mr.Boileau Loko,Raj Nallari,Mr.Kadima D. Kalonji,Mr.Montfort Mlachila Pdf

This paper explores the relationship between external debt and poverty. A number of observers have argued that high external indebtedness is a major cause of poverty. Using the first-differenced general method of moments (GMM) estimator, the paper models the impact of external debt on poverty, measured by life expectancy, infant mortality, and gross primary enrollment rates, while duly taking into account the impact of external debt on income. The paper thus endeavors to bring together the literature that links external debt with income growth and poverty. The main conclusion is that once the effect of income on poverty has been taken into account, external indebtedness indicators have a limited but important impact on poverty.

Author : Bela Balassa,André Barsony,Anne Richards,Organisation for Economic Co-operation and Development. Development Centre
Publisher : Development Centre of the Organisation for Economic Co-operation and Development
Page : 104 pages
File Size : 46,8 Mb
Release : 1981
Category : Business & Economics
ISBN : UCAL:B4354703

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The Balance of Payments Effects of External Shocks and of Policy Responses to These Shocks by Bela Balassa,André Barsony,Anne Richards,Organisation for Economic Co-operation and Development. Development Centre Pdf

Author : Tokhir Mirzoev,Rafael Portillo,Luis-Felipe Zanna,Mr.Andrew Berg
Publisher : International Monetary Fund
Page : 48 pages
File Size : 54,5 Mb
Release : 2010-03-01
Category : Business & Economics
ISBN : 9781451982091

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The Short-Run Macroeconomics of Aid Inflows by Tokhir Mirzoev,Rafael Portillo,Luis-Felipe Zanna,Mr.Andrew Berg Pdf

We develop a tractable open-economy new-Keynesian model with two sectors to analyze the short-term effects of aid-financed fiscal expansions. We distinguish between spending the aid, which is under the control of the fiscal authorities, and absorbing the aid-using the aid to finance a higher current account deficit-which is influenced by the central bank's reserves policy when access to international capital markets is limited. The standard treatment of the transfer problem implicitly assumes spending equals absorption. Here, in contrast, a policy mix that results in spending but not absorbing the aid generates demand pressures and results in an increase in real interest rates. It can also lead to a temporary real depreciation if demand pressures are strong enough to threaten external balance. Certain features of low income countries, such as limited participation in domestic financial markets, make a real depreciation more likely by amplifying demand pressures when aid is spent but not absorbed. The results from our model can help understand the recent experience of Uganda, which saw an increase in government spending following a surge in aid yet experienced a real depreciation and an increase in real interest rates.

Author : Mr.Steven Phillips,Mr.Luis Catão,Mr.Luca Antonio Ricci,Mr.Rudolfs Bems,Ms.Mitali Das,Mr.Julian Di Giovanni,Ms.Filiz Unsal,Marola Castillo,Jungjin Lee,Jair Rodriguez,Mr.Mauricio Vargas
Publisher : International Monetary Fund
Page : 68 pages
File Size : 47,5 Mb
Release : 2014-01-13
Category : Business & Economics
ISBN : 9781484346785

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The External Balance Assessment (EBA) Methodology by Mr.Steven Phillips,Mr.Luis Catão,Mr.Luca Antonio Ricci,Mr.Rudolfs Bems,Ms.Mitali Das,Mr.Julian Di Giovanni,Ms.Filiz Unsal,Marola Castillo,Jungjin Lee,Jair Rodriguez,Mr.Mauricio Vargas Pdf

The External Balance Assessment (EBA) methodology has been developed by the IMF’s Research Department as a successor to the CGER methodology for assessing current accounts and exchange rates in a multilaterally consistent manner. Compared to other approaches, EBA emphasizes distinguishing between the positive empirical analysis and the normative assessment of current accounts and exchange rates, and highlights the roles of policies and policy distortions. This paper provides a comprehensive description and discussion of the 2013 version (“2.0”) of the EBA methodology, including areas for its further development.

Author : Ms.Stefania Fabrizio
Publisher : International Monetary Fund
Page : 52 pages
File Size : 52,6 Mb
Release : 2010-03-16
Category : Business & Economics
ISBN : 9781589069299

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Coping with the Global Financial Crisis by Ms.Stefania Fabrizio Pdf

This forthcoming title in the Departmental Paper Series describes the special challenges facing low-income countries as economic growth contracts by an estimated 1.1 percent globally. Coping with the Crisis: Challenges Facing Low-Income Countries provides an assessment of the implications of the financial crisis for low-income countries, evaluates the short-term macroeconomic outlook for these countries, and discusses the policy challenges they face. Chapters cover the outlook for global economic growth and commodity prices, an overview of how low-income countries have been affected, fiscal policy, monetary and exchange rate policy responses, potential external financing needs and how the international community, including the IMF, can help countries meet them. The challenges ahead for low-income countries are delineated, including debt vulnerabilities and the need for countries to develop well-regulated local capital markets and banking systems, as well as enhanced public sector efficiency.

Author : Yasemin Bal Gunduz
Publisher : International Monetary Fund
Page : 47 pages
File Size : 44,9 Mb
Release : 2017-05-09
Category : Business & Economics
ISBN : 9781475599732

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Debt Sustainability in Low-Income Countries by Yasemin Bal Gunduz Pdf

This paper estimates the determinants of external debt distress in low-income countries (LICs), disentangling the roles of institutions, shocks, and policies. The most prominent factors in raising the risk of debt distress are the weak protection of private property rights, adverse shocks to real non-oil commodity prices, and a high debt burden. Results also suggest that weak economic institutions tend to raise the probability of debt distress through persistently weak economic policies and high vulnerability to external shocks. The model enables a more granular analysis of debt sustainability in LICs and has a higher predictive power compared to the earlier scant literature.