In the highly globalized world economy of our times, where markets are tightly integrated, setting domestic economic policy with a view simply to keeping one’s house in order is no longer optimal. New responsibilities follow for each member of the community of countries from the...

In this article I review Joseph P. Joyce’s thought-provoking book The IMF and global financial crises: Phoenix rising?†(Cambridge University Press, 2012). The book is a comprehensive yet concise appraisal of the IMF’s history of successes and failures in preventing crises, and...

This study introduces a general approach to investigate resource allocation and asset prices in an economy with uncertainty and shifts in market sentiment. The approach presents a number of key features: first, it proposes a choice-theoretic model that determines the utility that the agents...

This study analyzes the emergence of secular stagnation as the consequence of a rise in the preference for liquidity. Such a rise is caused by a persistent set of pessimistic expectations. This study also investigates the effectiveness of a broad range of demand-management policies in dealing...

IMF surveillance of the international monetary and financial system is a global public good. Its effectiveness depends critically on the dynamics that underpin the mechanisms governing the IMF and global finance. These dynamics, in turn, reflect the interests and power of influence of countries...

In any economic environment where decisions are decentralized, agents consider the risk that others might unfairly exploit informational asymmetries to their own disadvantage. Incomplete results, especially, lies at the heart of financial transactions in which agents trade real claims for...

Over the past decades, finance theory has contributed significantly to understanding banks and identifying what qualifies them to be special financial intermediaries. Historically, banks have had a comparative advantage in certain functions - such as providing liquidity and payment services and...