This paper examines the empirical evidence on currency crises and proposes a specific early warning system. This system involves monitoring the evolution of several indicators that tend to exhibit an unusual behavior in the periods preceding a crisis. When an indicator exceeds a certain...

An econometric investigation is undertaken into the efficiency of commodity futures markets. Despite considerable empirical literature, there is no consensus on whether or not the markets are efficient. This study suggests that for certain commodities expected excess returns to futures...

The early stages of transformation of centrally planned economies into market economies are examined. In the transitional phase when an economy is no longer centrally planned, but not yet market based--when it is a "previously centrally planned economy"--expectations play a key role. A model is...

The possibility of reducing the real value of domestic nonindexed government debt through inflation is studied. A central result is that this kind of debt liquidation is possible even though prices are sticky and government bonds are short term. A policy implication is that short bond maturities...

The role of debt maturity in managing the government's incentives to use opportunistic inflation to reduce the ex post real value of its nominal liabilities is explored. The maturity structure of government debt is shown to be a powerful instrument for affecting the time profile of the inflation...

This paper examines trade reforms of uncertain duration in economies affected by real shocks. These reforms induce consumption booms regardless of their duration and of the degree of intertemporal substitution. A recession may follow the boom, depending on the outcome of the reform and on...

The characteristics of recent capital inflows into Latin America are discussed. It is argued that these inflows are partly explained by conditions outside the region, like the recession in the United States and lower international interest rates. The importance of external factors suggests that...

An important obstacle encountered in analyzing interest rate targeting is that standard models usually lead to indeterminacy of the price level or the inflation rate. This paper develops a simple framework that avoids such problems, because the bonds whose interest rate is controlled provide...

This paper examines factors determining the allocation of bank credit to the enterprise sector and the implications of this allocation for aggregate supply and macroeconomic performance in the former socialist economies. It first develops a model to explain how changes in demand for money by the...