The current weakness in the global economy has generated a debate on the likely outlook for the world economy and the appropriate response for monetary policies. The world economy is currently being buffeted by a number of major shocks. A particular feature has been the large fall in equity...

The International Monetary Fund (henceforth "the IMF" or "the Fund") was conceived at a conference at the Mount Washington Hotel in Bretton Woods, New Hampshire, in July 1944 and its Articles of Agreement entered into force in December 1945. The World Bank (henceforth "the Bank") was set up at...

This paper presents a model of capital account crises and uses it to study resolution mechanisms for both liquidity and solvency crises. It shows that liquidity crises should be dealt with by a standstill combined with IMF lending into arrears, whereas solvency crises should be resolved by debt...

This paper analyzes the impact of terms of trade and risk-premium shocks on a small open economy in an intertemporal, Dutch disease model, with international capital mobility. It is shown that when the economy experiences a permanent improvement in the terms of trade, the Dutch disease effect...

This paper investigates the importance of fiscal policy in providing macroeconomic stabilization in a monetary union. We use a microfounded New Keynesian model of a monetary union, which incorporates persistence in inflation and non-Ricardian consumers, and derive optimal simple rules for fiscal...

This paper considers fiscal and monetary policy in a short-run static macroeconomic model. There are two objectives, control of inflation and control over the growth of national wealth, and a third outcome of importance, a high level of employment. There are two instruments, monetary policy (the...

A simple model of North-South interaction is presented with a Keynesian North producing industrial goods and a Classical South producing corn. If the terms of trade clear the corn market then commodity price stabilisation can only slightly increase the average value of Northern real consumption....

This Paper presents a new model of the East Asian crisis that combines three elements – multiple equilibria, investment collapse, and moral hazard – in a single simple account. We locate the causes of the crisis in poor financial regulation, highly-geared financial institutions, and implicit...