Nigeria's oil boom has not brought an end to perennial stagnation in the non-oil economy. Is this the unavoidable consequence of the resource boom or have misguided policies contributed? This paper indicates that the extreme volatility of expenditure rather than Dutch Disease effects are behind...

Russia entered the global crisis with strong fiscal position, low public debt, and large fiscal and monetary reserves, which helped it cushion the crisis shocks. But the rise in the non-oil fiscal deficit in 2007-08 and, more importantly, the massive impact of the global crisis in late 2008 and...

Fiscal sustainability analysis (FSA) is an important component of macroeconomic analysis. The authors review various quantitative approaches to FSA with a major objective to bring these approaches together and to present a user-friendly tool for FSA that reflects modern developments. They...

Unsustainable fiscal deficits were the chief reason for the inflation that has persisted in Eastern Europe since 1989. Deficits need to be cut back, but by how much for a given inflation target? The authors develop a simple framework for debt, the deficit, and inflation to study the interactions...

Fiscal sustainability analysis (FSA) is an important component of macroeconomic analysis for many developing countries. To further enhance understanding of fiscal policy and the constraints faced by policymakers, the authors develop a toolkit for FSA in middle-income countries which builds on...

Support for economic reforms has often shown puzzling dynamics: many reforms that began successfully lost public support. This paper shows that learning dynamics can rationalize this paradox because the process of revealing reform outcomes is an example of sampling without replacement. This...

Survey results in Poland indicate that hard budgets and import comeption can spur state firms to adjust even when privatization lags behind. As they examine the underpinning of Polish reform, the authors address the key question of why managers instigated such adjustment. They examine how...

Bulow and Rogoff showed in 1988 that auction based purchases of debt could not be an effective way to capture the secondary market discount, since the purchase pushes up the secondary market afterward. The author of this report points out another problem with cash debt buy backs - one that...

Rapid trade liberalization is often followed by a surge of imports and a deterioration in the current account. The macroeconomic counterpart of this is a decline in private savings. This paper discusses the impact of policy uncertainty on private savings. The author uses the Ordinal Certainty...

Interest rates fell sharply after Mexico's Brady deal, and private investment and growth recovered. The authors show that the main benefit of debt relief was not to lower expected payments but to reduce uncertainty. Reduced uncertainty was found to be the dominant factor in explaining the...