Both analytical models and casual empiricism suggest that the timing of the recessionary costs associated with inflation stabilization in chronic inflation countries may depend on the nominal anchor that is used. Under money-based stabilization, the recession occurs at the beginning of the...

The revised Bank of Korea (BOK) Act states that the primary goal of monetary policy is price stability and recently monetary policy has moved toward an inflation targeting framework. This study explores some of the practical aspects that need to be considered for this move. In particular, issues...

The revised Bank of Korea (BOK) Act states that the primary goal of monetary policy is price stability and recently monetary policy has moved toward an inflation targeting framework. This study explores some of the practical aspects that need to be considered for this move. In particular, issues...

Recent techniques designed to draw inferences about the credibility of changes in macroeconomic policy regimes are examined. An alternative two-step approach, based on the decomposition between permanent and transitory components of a "credibility variable," is proposed. The methodology is then...

Primary commodities still account for the bulk of exports in many developing countries. However, real commodity prices have been declining almost continuously since the early 1980s. The appropriate policy response to a terms of trade shock depends importantly on whether the shock is perceived to...

Using annual data for Colombia over the last 30 years, we test opposing theories that explain macroeconomic fluctuations: the neoclassical synthesis, which posits that in the presence of temporary price rigidity an unanticipated monetary expansion produces output gains that erode over time with...

This paper presents evidence, using data from Consensus Forecasts, that there is an "attraction" to conform to the mean forecasts; in other words, views expressed by other forecasters in the previous period influence individuals' current forecast. The paper then discusses--and provides further...

"Program numbers" from a sample of IMF-supported programs are studied as if they were forecasts, through statistical analyses of the relationship between projections and outcomes for growth, inflation, and three balance of payments concepts. Statistical bias is found only for projections of...

This paper analyzes the behavior of closed-end country fund discounts, including evidence from the Mexican and East Asian crises. It finds that the ratio of fund prices to their fundamental value increases dramatically during a crisis, an anomaly that we denote the "closed-end country fund...

This paper evaluates the performance of Consensus Forecasts of real GDP growth for a large number of industrialized and developing countries for the time period October 1989 to December 1999. The questions addressed are the following: How accurate are private sector forecasts? How does their...