In this paper we study the macroeconomic effects of large exchange rate appreciations. In a sample of 128 countries since 1960, we identify 25 episodes of large nominal and real appreciations shocks and study their macroeconomic effects in a dummy-augmented panel autoregressive model. Our...

In principle, the sovereign credit rating industry could help mitigate the congestion externalities common to world capital markets that arise from the failure of market participants to internalise the social cost of external borrowings. This would require that modifications in ratings on...

The variety of channels through which devaluation of the exchange rate impacts on real tax receipts, calls for empirical clarification. This paper should be seen as a first attempt towards empirical evidence. It establishes the causal relationships between the real exchange rate and real tax...

The increased importance of rating agencies for emerging-market finance has brought their work to the attention of a wider group of observers — and under criticism. This paper evaluates whether the importance of ratings for developing-country finance has changed since the Asian Crisis and...

Three novel macroeconomic policy challenges are discussed in this paper: the macroeconomic implications of China’s emergence; the implications of intensifying financial integration; and the interaction of Asia’s foreign exchange regime with monetary policy in the OECD area. First, China may...

The paper evaluates the economics of foreign investment regulation for pension funds, with a focus on developing countries, where fully-funded pension systems are being started de novo. The analysis produces three observations. First, the benefits of global portfolio diversification apply...

Strong growth in China and India has led to improvements in raw-material exporting countries' terms of trade and attracted complementary finance. The long-term challenge for these countries, where institutions are often fragile, is to avoid the so-called “resource curse”. This paper aims to...

The 1990s have witnessed pronounced boom-bust cycles in emerging-markets lending, culminating in the Asian financial and currency crisis of 1997-98. By examining the links between sovereign credit ratings and dollar bond yield spreads over 1989-97, this paper aims at broad empirical content for...

How open are the capital accounts in Korea and Taiwan? Has there been a trend towards more financial openness during the 1980s? This paper aims at answering both questions by estimating a model of interest determination first outlined by Edwards and Khan, in an extension suggested by Haque and...

The recent currency crises in Latin America and Asia have hit countries with strong macroeconomic fundamentals but weak domestic financial systems. Private capital flows, attracted by disorderly financial liberalisation and exchange rate pegs, reversed abruptly when financial-sector weaknesses...