Since the late 1980s, there has been an abrupt turnaround in Sweden's public finances. The present paper makes the case for the very early adoption of a policy of medium-term fiscal consolidation in Sweden, notwithstanding the presently relatively depressed state of the Swedish economy. It does...

The role of the international commodity market in transmitting disturbances is considered in a model that incorporates commodities as an input in production. The analysis employs a three-country framework: a liquidity-constrained commodity supplier and two industrial countries that import the...

This paper attempts to identify optimal and sustainable exchange rate regimes in a world economy comprising two countries. By developing a Barro-Gordon two-country macroeconomic model, noncooperative equilibria are obtained under different assumptions of monetary policy commitments and different...

The interwar period was marked by the end of the classical gold standard regime and new levels of macroeconomic disorder in the world economy. The interwar disorder often is linked to policies inconsistent with the constraint of the openeconomy trilemma-the inability of policymakers...

This paper investigates the extent to which output has recovered from the Asian crisis. A regime-switching approach that introduces two state variables is used to decompose recessions in a set of six Asian countries into permanent and transitory components. While growth recovered fairly quickly...

In this paper, we examine how country insurance schemes affect policymakers' incentives to undertake reforms. Such schemes (especially when made contingent on negative external shocks) are more likely to foster than to delay reform in crisis-prone volatile economies. The consequences of country...

In this paper, we examine how country insurance schemes affect policymakers' incentives to undertake reforms. Such schemes (especially when made contingent on negative external shocks) are more likely to foster than to delay reform in crisis-prone volatile economies. The consequences of country...

This paper decomposes the sources of the peace dividend into global, regional, and country-specific factors, and analyzes their relative importance. It finds that the easing of international and regional tensions and the existence of IMF-supported adjustment programs are systematically related...

This paper decomposes the sources of the peace dividend into global, regional, and country-specific factors, and analyzes their relative importance. It finds that the easing of international and regional tensions and the existence of IMF-supported adjustment programs are systematically related...

The effects of membership in the ERM are analyzed using vector autoregression techniques. The results indicate that while the ERM has had little effect on the nature of the shocks hitting the economies, it has had a significant effect on the response of member countries to these shocks, making...