Why did monetary authorities hold large gold reserves under Bretton Woods (1944-1971) when only the US had to? We argue that gold holdings were driven by institutional memory and persistent habits of central bankers. Countries continued to back currency in circulation with gold reserves,...

We estimate a gravity model to address the question of whether Africa’s bilateral trade with industrial countries is “unusual” compared with other developing country regions. Our main finding is that the unusually low level of African trade is explained by economic size, geographical...

The North Atlantic financial crisis of 2008-2009 has spurred renewed interest in reforming the international monetary system, which has been malfunctioning in many aspects. Large and volatile capital flows have promoted greater volatility in financial markets, leading to recurrent financial...

IMF advice on fiscal policy is given within a strong accounting framework. Published sources in the last ten years show the direction and change of advice. The treatment of central bank losses, government arrears, and credit subsidies are discussed as examples. Advice on taxation, expenditure,...

The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and...

The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and...

This paper explores recent versions of older ideas for stabilizing the value of money based on an independently defined unit of account. The gold standard was such a system, but suffered from gold’s fluctuating relative value and the costly need to redeem money for gold. This paper explores...

This paper addresses several fundamental issues raised by recent developments in the world economy and considers their implications for the design and functioning of the international monetary system. We do not make any proposals. The four issues examined in the paper are: (1) Can the exchange...

This paper considers the extent to which the North American Free Trade Area (NAFTA) meets the criteria for a common currency area. NAFTA is compared with the EC, a regional grouping for which initial plans for a monetary union are already in place. Most of the anticipated benefits from a...

This paper analyses empirically the economic factors that lead to approval of Fund financial arrangements. We account for both the economic variables that induce a country to seek an arrangement with the Fund ("demand-side" factors) and the macroeconomic policy commitments that the Fund...