License to Spill: How Do We Discuss Spillovers in Article IV Staff Reports

By Jelle Barkema, Borislava Mircheva, Mico Mrkaic, Yuanchen Yang

May 7, 2021

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Format: Chicago

Jelle Barkema, Borislava Mircheva, Mico Mrkaic, and Yuanchen Yang. License to Spill: How Do We Discuss Spillovers in Article IV Staff Reports, (USA: International Monetary Fund, 2021) accessed November 7, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper dives into the Fund’s historical coverage of cross-border spillovers in its surveillance. We use a state-of-the-art deep learning model to analyze the discussion of spillovers in all IMF Article IV staff reports between 2010 and 2019. We find that overall, while the discussion of spillovers decreased over time, it was pronounced in the staff reports of some systemically important economies and during periods of global spillover events. Spillover discussions were more prominent in staff reports covering advanced and emerging market economies, possibly reflecting their role as sources of global spillovers. The coverage of spillovers was higher in the context of the real, financial, and external sectors. Also, countries with larger economies, higher trade and capital account openess and lower inflation are more likely to discuss spillovers in their Article IV staff reports.

Subject: Balance of payments, Capital account, Econometric analysis, Economic sectors, Financial crises, Financial sector policy and analysis, Inflation, Machine learning, Prices, Probit models, Spillovers, Technology

Keywords: Capital account, Discussion of spillover, General spillover pattern, Global, IMF staff calculation, Inflation, Machine learning, Model performance, Probit models, Spillover discussion, Spillover event, Spillovers

Publication Details

Pages:

25
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/134
Stock No:

WPIEA2021134
ISBN:

9781513573670
ISSN:

1018-5941

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