World Economic Outlook

World Economic Outlook

Financial Crises: Causes and Indicators

May 1998

A Survey by the Staff of the International Monetary Fund
©1998 International Monetary Fund

The World Economic Outlook presents the IMF staff’s analysis and projections of economic developments at the global level, in major country groups (classified by region, stage of development, etc.), and in many individual countries. It focuses on major economic policy issues as well as on the analysis of economic developments and prospects. It is usually prepared twice a year, as documentation for meetings of the International Monetary and Financial Committee, and forms the main instrument of the IMF’s global surveillance activities.

Disclaimer
Use the free Adobe Acrobat Reader to view pdf files.
Tips for using PDF files

Contents
Assumptions and Conventions
Preface
Chapter I 198k pdf file	Global Economic Prospects and Policy Considerations
	The Asian Crisis
	Advanced Economies
	Developing Countries
	Countries in Transition
	Appendix: Countdown to EMU--Progress Toward
		Convergence and Challenges Remaining
	Boxes
	1.	The Role of Hedge Funds in Financial Markets
	2.	Moral Hazard and IMF Lending
	3.	International Monetary System: Measures to Reduce the Risk of Crises
	Table
	1.	European Union: Convergence Indicators
	Figures
	1.	World Output and Inflation
	2.	Nominal and Real Interest Rates in the Prospective Euro Area
	3.	European Union: Average Inflation and General Government Balance
	4.	European Union: General Government Budget Positions
Chapter II 314k pdf file	Global Repercussions of the Asian Crisis
		and Other Issues in the Current Conjuncture
	The Global Growth Outlook
	Prospects for Global Inflation (or Deflation)
	Implications of Recent Currency Realignments for
		Countries' International Competitiveness
	Prospects for Global Flows of Funds and Current
		Account Balances
	Outlook for Japan
	Emerging Market Countries: Selected Issues
	Box
	4.	Policy Assumptions Underlying the Projections for Selected Advanced Economies
	Tables
	2.	Overview of the World Economic Outlook Projections
	3.	Advanced Economies: Real GDP, Consumer
		Prices, and Unemployment Rates
	4.	Major Industrial Countries: General Government Fiscal Balances and Debt
	5.	Selected Developing Countries: Real GDP and Consumer Prices
	6.	Countries in Transition: Real GDP and Consumer Prices
	7.	Recent Exchange Rate Movements on Bilateral
		and Multilateral Bases
	8.	Developing Countries, Countries in Transition,
		and Newly Industrialized Economies: Net Capital Flows
	9.	Gross Private Financing to Emerging Market Economies
	10.	Selected Economies: Current Account Positions
	11.	Selected Latin American Economies: Macroeconomic Indicators
	12.	Sub-Saharan Africa: Selected Economic Indicators
	Figures
	5.	Selected Asian Economies: Bilateral U.S. Dollar Exchange Rates and Equity Prices
	6.	Major Industrial Countries: Output Gaps
	7.	Major Industrial Countries: Indices of Monetary Conditions
	8.	Selected European Union Countries and the United States: Indicators of Consumer and Business Confidence
	9.	Selected European Countries: Real Total Domestic Demand
	10.	Major Industrial Countries: Nominal Interest Rates
	11.	Selected Advanced Economies: Inflation
	12.	Advanced Economies: Inflation and Commodity Prices
	13.	Major Industrial Countries: Effective Exchange Rates
	14.	Japanese Banking Sector: Selected Indicators
	15.	ASEAN-4 plus Korea: Aggregate Trade Balance
	16.	Paths of Output Gaps in Cases of Financial Sector Shocks
	17.	Selected Latin American Countries: Short-Term Interest Rates and Exchange Rates
	18.	Egypt: Basic Macroeconomic Data
Chapter III 182k pdf file	The Business Cycle, International Linkages,
		and Exchange Rates
	Business Cycles
	The Relationship Between Business Cycles and
		Exchange Rates
	Implications for Policy and Surveillance
	Box
	5.	Evaluating Exchange Rates
	Table
	13.	Major Industrial Countries: Business Cycle Indicators
	Figures
	19.	Major Industrial Countries: Output Gaps
	20.	Major Industrial Countries: Unemployment, Inflation, and Output Gaps
	21.	Business Cycles and Output Gaps
	22.	Three Major Industrial Countries: Real Effective Exchange Rates and Selected Relative Cyclical Variables
	23.	Selected Major Industrial Countries: Temporary Dollar Appreciation Scenario
	24.	Three Major Industrial Countries: Variability in Effective Exchange Rates
Chapter IV    215k pdf file	Financial Crises: Characteristics and Indicators of
		Vulnerability
	Types of Crises
	Identifying Crises
	Origins of Currency and Banking Crises
	Currency Crises and Contagion
	Indicators of Vulnerability
	Stylized Behavior of Macroeconomic Variables Before
		and After Crises
	Early Warning Signals of Vulnerability to Currency Crises
	Boxes
	6.	Resolving Banking Sector Problems
	7.	Effective Banking Prudential Regulations and Requirements
	8.	The Current Account and External Sustainability
	Tables
	14.	Selected Crises: Costs of Restructuring Financial
		Sectors and Nonperforming Loans
	15.	Costs of Crises in Lost Output Relative to Trend
	16.	Significance of Early Warning Indicators of Vulnerability to Currency Crises
	Figures
	25.	Incidence of Currency and Banking Crises
	26.	Macroeconomic Characteristics of Currency Crises
	27.	Macroeconomic Characteristics of Banking Crises
	28.	Asian Currency Crisis: Indicators of Vulnerability
Chapter V 165k pdf file	Progress with Fiscal Reform in Countries in
		Transition
	From Stabilization to Sustainability
	Transition and Government Revenue
	Transition and Government Expenditure
	Intergovernmental Fiscal Relations
	Legal Reform, Transparency, and Accountability
	Boxes
	9.	Russia's Fiscal Challenges
	10.	Pension Reform in Countries in Transition
	Tables
	17.	Countries in Transition: General Government Balance
	18.	Countries in Transition: General Government Revenue
	19.	Countries in Transition: General Government Expenditure
	20.	Selected Countries in Transition: Scenarios for Fiscal Sustainability
	21.	Selected Countries in Transition: Main Items in the
		General Government Revenue Structure, 1996
	22.	Selected Countries in Transition: Registered Unemployment
	23.	Selected Countries in Transition: Estimated Poverty
		Headcount and Poverty Deficit, in 1993–95
	24.	Selected Countries in Transition: Main Items
		in the General Government Expenditure Structure, 1996
	25.	Selected Countries in Transition: Life Expectancy at Birth
	26.	Selected Countries in Transition: Shares of Education
		and Health in Total Employment
	Box 9. Russian Federation: Summary Operations of the General Government
	Box 10. Public Pension Systems in Countries in Transition
	Box 10. Countries in Transition: Public Pension Expenditure, 1993 and 1996
	Figures
	29.	Countries in Transition: General Government Revenue and Expenditure, 1997
	30.	Countries in Transition: Government Revenue, 1997
Annexes 99k pdf file	I.	Transparency in Government Operations
		Why Fiscal Transparency?
		Institutions and Behavior
		Government Accounts
		Indicators and Projections
		Overall Trends and Priorities
		Role of the IMF in Promoting Fiscal Transparency
	II.	Recent Developments in Primary Commodity Markets
		Effects of the Asian Crisis
		Effects of Weather
		Developments in Specific Markets
		Near-Term Outlook
	Table
	27.	Price Declines for Individual Commodities and Countries Most Affected in Foreign Exchange Earnings
	Figures
	31.	Selected Asian Countries' Shares in World Consumption of Primary Commodities
	32.	Commercial Stocks of Petroleum in OECD Countries
	33.	Real Commodity Prices and World Output
Statistical Appendix 380k pdf file	Assumptions
	Data and Conventions
	Classification of Countries
	List of Tables
		Output (Tables A1–A7)
		Inflation (Tables A8–A13)
		Financial Policies (Tables A14–A21)
		Foreign Trade (Tables A22–A26)
		Current Account Transactions (Tables A27–A32)
		Balance of Payments and External Financing
		(Tables A33–A37)
		External Debt and Debt Service (Tables A38–A43)
		Flow of Funds (Table A44)
		Medium-Term Baseline Scenario (Tables A45–A46)
Selected Topics   33k pdf file	World Economic Outlook and Staff Studies for the World Economic Outlook, Selected Topics, 1992–98

Contents