Working Papers
1996
August 1, 1996
How Accurate Are the Imf's Short-Term Forecasts? Another Examination of the World Economic Outlook
Description: This paper analyzes the short-term forecasts for industrial and developing countries produced by the International Monetary Fund, and published twice a year in the World Economic Outlook (WEO). For the industrial country group, the WEO forecasts for output growth and inflation are satisfactory and pass most conventional tests in forecasting economic developments, although forecast accuracy has not improved over time, and predicting the turning points of the business cycle remains a weakness. For the developing countries, the task of forecasting movements in economic activity is even more difficult and the conventional measures of forecast accuracy are less satisfactory than for the industrial countries.
August 1, 1996
Macroeconomic Conditions and Pressures for Protection Under Antidumping and Countervailing Duty Laws: Empirical Evidence from the United States
Description: Antidumping and countervailing duty procedures are governed by specific rules requiring both injury (by reason of imports) and dumping/subsidies, and thus might be expected to be less susceptible to pressures for protection arising from cyclical movements in the domestic macroeconomy. This paper investigates whether there is a connection between the state of domestic macroeconomic activity and pressures for protection under antidumping and countervailing duties. The evidence suggests that pressures for protection under these measures since the Tokyo Round of multilateral trade talks have advanced during periods of macroeconomic weakness and receded during periods of macroeconomic strength.
Notes: Also published in Staff Papers, Vol. 44, No. 1, March 1997.
August 1, 1996
Capital Flows in a Transitional Economy and the Sterilization Dilemma: The Hungarian Case
Description: This paper compares Hungary’s experience with sterilization with that of other capital inflow episodes. The study focuses on the short-run impact of sterilization on monetary policy. The empirical data indicate that sterilized interventions by the National Bank of Hungary (NBH) were not significant until mid-1994, sometime after the return to power of the former Communist leaders. Thus, in the second half of 1994, the NBH began to demonstrate more firmly its independence by tightening monetary policy. By the beginning of 1995, the direction of fiscal policy had begun to show consonance with the overall aims of monetary policy.
August 1, 1996
Are Australia's Current Account Deficits Excessive?
Description: This paper compares the evolution of the Australian current account balance over the period 1954–94 against an optimal current account derived from a consumption-smoothing model. The findings indicate that the Australian current account was not used to smooth consumption optimally in the period prior to the relaxation of capital controls in the early 1980s. The results also suggest that in the period since the mid-1980s Australia’s current account deficits have become excessive, and that the increase in national saving required to satisfy its external borrowing constraint is about 2 to 4 percent of GDP.
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1996
July 1, 1996
The Efficiency of VAT Implementation: A Comparative Study of Central and Eastern European Countries in Transition
Description: This paper presents calculations of the efficiency with which value-added taxes are collected in five transition economies in Central and Eastern Europe. Actual VAT revenues in 1994 are compared with those that would have resulted if the statutory VAT rates had been applied without any revenue leakage. The five countries fall into two broad groups, one exhibiting relatively high collection efficiency, and the other relatively low efficiency. While lack of detailed information on tax rules and consumption patterns makes definitive conclusions difficult, the impact of exemptions is shown to likely strengthen the comparative results.
July 1, 1996
The Effects of the European Economic and Monetary Union (EMU)on National Fiscal Sustainability
Description: This paper presents a methodology to analyze the responsiveness of fiscal sustainability to the “endogenous fiscal discipline” that will be strengthened by the EMU. This discipline arises in response to the harmonization of tax systems, the loss of control of current and prospective money financing, and the deepening of financial market-based discipline. The model used in this paper is a generalization of Blanchard’s (1984) model, in which the interest rate is determined endogenously. This provides the framework to analyze more features of the linkage between sustainability and endogenous fiscal discipline. This paper also presents a new intratemporal fiscal sustainability index.