The recent great financial crisis and the ensuing deep recessions have placed in sharp relief the fundamental issue of how financial factors, including financial instability, interact with the real economy. In order to understand the nature of these interactions and formulate policies that would...

he IMF monetary model focuses on the balance of payments. This paper adds a poverty stabilization objective to it. Drawing on statistical income distribution theory, key aspects of the head count poverty indicator are introduced. The resulting model reproduces traditional balance of payments...

This paper examines how poverty alleviation can be incorporated as a policy objective in developing country macroeconomic models, analogous to the unemployment objective in industrial country applications. Three elements are involved: selection of the appropriate poverty measure, establishment...