Working Papers
1997
November 1, 1997
Sequencing Capital Account Liberalization: Lessons From the Experiences in Chile, Indonesia, Korea, and Thailand
Description: This paper examines issues in sequencing and pacing capital account liberalization and draws lessons from experience in four countries (Chile, Indonesia, Korea, and Thailand). The paper focuses on the interrelationship between capital account liberalization, domestic financial sector reforms, and the design of monetary and exchange rate policy. It concludes that capital account liberalization should be approached as an integrated part of comprehensive reform strategies and should be paced with the implementation of appropriate macroeconomic and exchange rate policies.
November 1, 1997
The Efficiency of Government Expenditure: Experiences From Africa
Description: This paper assesses the efficiency of government expenditure on education and health in 38 countries in Africa in 1984-95, both in relation to each other and compared with countries in Asia and the Western Hemisphere. The results show that, on average, countries in Africa are less efficient than countries in Asia and the Western Hemisphere; however, education and health spending in Africa became more efficient during that period. The assessment further suggests that improvements in educational attainment and health output in African countries require more than just higher budgetary allocations.
November 1, 1997
Towards a System of Multilateral Unit Labor Cost-Based Competitiveness Indicators for Advanced, Developing, and Transition Countries
Description: This paper attempts to extend the range of countries covered by the IMF’s multilateral real exchange rate indexes based on relative unit labor costs (REER-ULCs) in manufacturing. A data set was assembled that permits calculation of REER-ULCs for 23 newly industrialized, developing, and transition countries in addition to the 21 industrial countries covered by the current system. Although the results are mostly quite encouraging, they should be considered preliminary because of uncertainty about the reliability and comparability of the underlying data. Also, unit labor costs are not available on as timely a basis as consumer price indexes (CPIs), especially for nonindustrial countries. Thus, the ULC-based indicators should supplement rather than replace the current CPI-based system.
November 1, 1997
Nominal Income and the Inflation-Growth Divide
Description: This paper deals with aggregate demand fluctuations and their price and output effects. Starting with a nominal income solution, a rule for determining the inflation and output growth effects is presented. Assigning alternative values to the key parameters of the suggested rule generates different closure rules, such as the classical and the Keynesian and their modern counterparts. An application to major industrial country data indicates that the suggested rule is robust. Both inflation and output growth are affected by nominal shocks, but response patterns vary among the countries.
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