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The paper characterizes the feasibility of economic transformation as requiring the simultaneous attainment of macroeconomic stability, political support, and adequate private investment. Macroeconomic stability is defined as fiscal balance; political feasibility is related to the income gains and...
Persistent link: https://www.econbiz.de/10014396491
The paper discusses the case against a laissez faire approach to resource allocation and develops a model of supply bottlenecks. It argues that: (1) once budget constraints are hardened and credit markets begin to function appropriately, externalities associated with production bottlenecks and...
Persistent link: https://www.econbiz.de/10014398709
The paper emphasizes the role of institutions and incentives in the presence of externalities. An economy with multiple public decision makers is likely to experience "overspending," "undertaxing," "overborrowing," and "overinflation" unless effective institutions exist for overcoming...
Persistent link: https://www.econbiz.de/10013233750
The purpose of this paper is to study why decentralized economies often fail to achieve national objective in the presence of externalities. The paper employs a two-period, open economy framework in which the central government allocates its tax revenues among a larger number of individual...
Persistent link: https://www.econbiz.de/10013222246
The paper emphasizes the role of institutions and incentives in the presence of externalities. An economy with multiple public decision makers is likely to experience quot;overspending,quot; quot;undertaxing,quot; quot;overborrowing,quot; and quot;overinflationquot; unless effective institutions...
Persistent link: https://www.econbiz.de/10012781468
The paper characterizes the feasibility of economic transformation as requiring the simultaneous attainment of macroeconomic stability, political support, and adequate private investment. Macroeconomic stability is defined as fiscal balance; political feasibility is related to the income gains and...
Persistent link: https://www.econbiz.de/10012781697
The purpose of this paper is to study why decentralized economies often fail to achieve national objective in the presence of externalities. The paper employs a two-period, open economy framework in which the central government allocates its tax revenues among a larger number of individual...
Persistent link: https://www.econbiz.de/10012475365
The IMF's internal analysis of exchange rate issues has been guided by, and limited by, the conceptual and empirical frameworks that have emerged from the collective research of the economics profession. The research has provided several general approaches that are useful for assessing whether...
Persistent link: https://www.econbiz.de/10014411082
This paper builds a multiperiod, general equilibrium framework for analyzing the macroeconomic effects of financial reforms in developing countries and the costs of maintaining official safety nets under the financial system during such reforms. While a financial liberalization yields efficiency...
Persistent link: https://www.econbiz.de/10014398266
This note provides an overview of the uncovered interest parity assumption. It traces the history of the interest parity concept, summarizes evidence on the empirical validity of uncovered interest parity, and discusses the implications for macroeconomic analysis. The uncovered interest parity...
Persistent link: https://www.econbiz.de/10014398443