IMF Releases

New releases of the IMF are:

Policy Papers

• 2008 Triennial Surveillance Review - Overview Paper
  Summary: This triennial surveillance review (TSR) takes place in a time of change, with the Fund in the midst of a major refocusing effort. That surveillance has not been as effective as it should be has been amply documented, notably in previous surveillance reviews and several IEO evaluations. Since the 2004 review of bilateral surveillance (BSR), considerable efforts have been made to enhance its effectiveness, including an overhaul of the policy framework with the adoption of a new Surveillance Decision in 2007. And as part of the refocusing effort, more change is underway to deliver on the Managing Director's vision of an institution making better use of its comparative advantage, to be "more alert to emerging issues, more critical in its assessments (especially in good times), and more assertive in communicating its concerns."
• Progress Report on the Activities of the Independent Evaluation Office
  Summary: The reports provides an update on the activities of the Independent Evaluation Office of the IMF since its last report to the the IMF's policy-guiding body, the International Monetary and Finance Committee, in April 2008.
• Fuel and Food Price Subsidies - Issues and Reform Options
  Summary: Government price subsidies are pervasive in developed, emerging, and low-income countries. A subsidy is a form of government intervention resulting in a deviation of an actual price facing consumers and producers from a specified benchmark price. Subsidies affect consumption and production patterns as well as the distribution of resources, with important implications for the budget, expenditure composition, and long-term growth. They can and often do involve fiscal costs, but not all affect government fiscal accounts in the same way. Price subsidies have spillover effects onto prices and quantities in domestic, regional, or global markets. This paper discusses the key issues and policy options in the reform of subsidies for fossil fuels and selected food commodities, and their implications for the work of the Fund.
• The Fund's Response to the 2007-08 Financial Crisis - Stocktaking and Collaboration with the Financial Stability Forum
  Summary: The present financial crisis is testing the resilience of the global financial system as well as the robustness of national and multilateral policy frameworks. As requested by Executive Directors, this paper reviews recent progress in meeting these challenges, focusing on the role of the Fund and its collaboration with the Financial Stability Forum (FSF). In concert with other international bodies, the Fund has sought to promote appropriate policy responses to the financial turmoil, including through its report on The Recent Financial Turmoil-Initial Assessment, Policy Lessons, and Implications for Fund Surveillance, in the Global Financial Stability Report (GFSR) and the World Economic Outlook (WEO), as well as in recent Article IV consultations and Financial Sector Assessment Programs (FSAPs). The Fund has also responded to the International Monetary and Financial Committee's (IMFC) call for closer collaboration with other international fora, including by supporting the implementation of policy lessons from the crisis, such as the 67 FSF recommendations issued in April 2008.
• Report of the Executive Board Working Group on IMF Corporate Governance
  Summary: On May 21, 2008, the Executive Board discussed the report of the Independent Evaluation Office (IEO) on "Aspects of IMF Corporate Governance - Including the Role of the Executive Board". The Joint Statement issued by the Executive Board and the Managing Director following the Board discussion noted that many of the issues raised by the IEO were complex and interrelated. Furthermore, the follow-up discussion would require the engagement of all parties at many different levels, involving not only the Executive Board and Management, but also the Fund's membership and other stakeholders more broadly.
  This report presents the recommendations of the Working Group, based on work carried out during June-July 2008. The proposed detailed work plan in Table 1 is an integral part of this report. Section II of the report describes the work streams. Section III discusses issues beyond the IEO report and proposes a monitoring process. Section IV presents the recommendations.
• Provisional Agenda for the Eighteenth Meeting of the International Monetary and Financial Committee
  Summary: The following is the provisional agenda for the Eighteenth Meeting of the International Monetary and Financial Committee, which is to be convened on Saturday, October 11, 2008, at the IMF's Headquarters in Washington, D.C.
• Statement by the Managing Director to the International Monetary and Financial Committee (IMFC) on the IMF's Lending Role and Surveillance Priorities
  Summary: IMF staff has done extensive analysis of the crisis and its spillovers drawing on lessons from past crises, and disseminated information, analysis and policy advice through the Executive Board and intensive contacts with our members. We have also stepped up crisis preparedness efforts and are in close touch with individual members experiencing stress, standing ready to help with further advice and financial assistance.
• Report of the Managing Director to the International Monetary and Financial Committee on the IMF's Policy Agenda-IMF Responses to Global Economic Challenges
  Summary: The report provides an update on work in the following areas: global stability, IMF lending, food and fuel price developments, and modernizing the IMF.
• Review of the Fund's Financing Role in Member Countries
  Summary: This paper raises and discusses issues related to how the Fund provides financial assistance to its members. It is part of the strategic review to ensure the Fund remains relevant and effective. The objective is not to increase Fund lending, but to make sure the Fund has the right instruments and policies to help all of its members-with appropriate protection of Fund resources-as they integrate into a world of growing and increasingly complex cross-border flows. Other institutions (including major central banks and the World Bank) also are retooling their lending instruments and in the process grappling with similar issues. The paper offers a high-level view of the issues and does not make specific policy proposals. Policy proposals will be presented in follow-up papers, some of which are planned for Board discussion later in 2008.
• Proposed Reforms to the Exogenous Shocks Facility
  Summary: The review of the ESF is being accelerated in light of experience and worsening global economic conditions, in particular the surge in food and fuel prices. Despite having become effective in 2006, the ESF has yet to be used. Recent discussions with creditors, donors, potential users, and outside observers have highlighted a number of ways to enhance its effectiveness.
• Policy for Country Contributions for Capacity Building
  Summary: This paper proposes a strengthened country contributions policy for capacity-building services. It builds on the recent Executive Board discussions on capacity-building reforms, which included proposals for the use of charges (country contributions) to improve the effectiveness and efficiency of the Fund's capacity-building activities. On the basis of this country contributions policy, management intends to issue a staff guidance note on implementation and to take steps to bring it to the attention of members and other recipients of Fund capacity-building activities.
• The Spending and Absorption of Aid in PRGF Supported Programs
  Author/Editor: Berndt, Markus; Dudine, Paolo; Martijn, Jan Kees; Shonchoy, Abu
  Summary: This paper studies the spending and absorption of aid in PRGF-supported programs, verifies whether the use aid is programmed to be smoothed over time, and analyzes how considerations about macroeconomic stability influence the programmed use of aid. It finds that PRGF-supported programs allow countries to use most or almost all increases in aid within a few years. The paper finds some evidence that the programmed absorption of aid is higher in countries where reserve coverage is above a certain threshold, whereas programmed spending does not seem to depend on inflation. Finally, it shows that the presence of a PRGFsupported program does not constrain the actual spending and absorption of aid.
• Update on the Financing of the IMF's Concessional Assistance and Debt Relief to Low-Income Member Countries
  Summary: This paper provides a semi-annual review of the status of financing for Poverty Reduction and Growth Facility-Exogenous Shocks Facility (PRGF-ESF) lending, subsidization of emergency assistance to PRGF-eligible countries, and Heavily Indebted Poor Countries (HIPC) and Multilateral Debt Relief Initiative (MDRI) debt relief. The last review was completed by the IMF Executive Board on April 21, 2008.
  

Surveys

• IMF Welcomes Euro Zone Plan to Combat Crisis
  IMF Managing Director Dominique Strauss-Kahn welcomes a plan by the 15 European countries that use the euro to halt the financial crisis and says the U.S. rescue plan should be implemented "the sooner the better."
• World Finance Chiefs Back Action Plan to Combat Crisis
  World financial leaders endorsed an action plan announced by the seven leading advanced economies to combat the international financial crisis in what IMF Managing Director Dominique Strauss-Kahn called the "first big success in coordination" to halt the downward spiral in world markets and support the global financial system.
• IMF Presses Four-Step Plan to Halt Financial Spiral
  IMF Managing Director Dominique Strauss-Kahn calls on world financial leaders meeting in Washington to address the crisis of confidence in financial markets with coordinated international action.
• African Growth Eases as Region Responds to Price Shocks
  Growth in sub-Saharan Africa is projected to slow slightly, as the continent's worsening, though still strong performance reflects increases in food and fuel prices, slower world growth, and global financial turmoil.
• Africa Conference to Share Lessons from Economic Successes
  President Jakaya Kikwete of Tanzania and IMF Managing Director Dominique Strauss Kahn will host a high-level international conference in Dar es Salaam on March 10-11, 2009, to discuss how Africa can meet the challenge of sustaining and building on recent economic successes.
• Global Economy Hit by Three Major Shocks
  The IMF's October 2008 World Economic Outlook projects that global growth will slow substantially, hit by three major shocks-illustrated in this series of animated charts based on IMF projections.
• House Prices Compounding Crisis
  Housing prices have begun falling this year in several advanced economies. This decline is amplifying the effects of the current financial turmoil.
• Fair Value Accounting Gathers Interest in Current Turmoil
  The International Monetary Fund weighs in on a complicated and controversial question of how financial institutions should value assets and liabilities on their books.
• Emerging Equity Markets Pulled Into Global Crisis
  After more than a year of small spillovers from financial turmoil in advanced economies, equities in emerging markets succumbed to financial distress. However, unlike in past crises, the size of the spillover has not been uniform, the IMF says in a new report.

Country Reports

• Ghana: Selected Issues
• Morocco: Selected Issues
• St. Lucia: Statistical Appendix
• Bosnia and Herzegovina: Selected Issues
• Georgia: Request for Stand-By Arrangement - Staff Report; Staff Supplement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Georgia

Working Papers

• Wage-Price Setting in New EU Member States
  Author/Editor: Goretti, Manuela
  Summary: This paper analyzes wage- and price-setting relations in new EU member countries. Panel estimates indicate a strong and significant relationship between real wages and labor productivity, as well as evidence of wage pass-through to inflation. Terms of trade shocks do not feed through to real wages. Country-specific wage developments, beyond differences in labor productivity growth, are mostly explained by real wage catch-up from different initial levels and different labor market conditions. Qualitative evidence also suggests that public sector wage demonstration effects and institutional factors may play a role in wage determination.
• Does Openness to International Financial Flows Raise Productivity Growth?
  Author/Editor: Kose, M. Ayhan; Prasad, Eswar; Terrones, Marco
  Summary: This paper provides a comprehensive analysis of the relationship between financial openness and total factor productivity (TFP) growth using an extensive dataset that includes various measures of productivity and financial openness for a large sample of countries. We find that de jure capital account openness has a robust positive effect on TFP growth. The effect of de facto financial integration on TFP growth is less clear, but this masks an important and novel result. We find strong evidence that FDI and portfolio equity liabilities boost TFP growth while external debt is actually negatively correlated with TFP growth. The negative relationship between external debt liabilities and TFP growth is attenuated in economies with higher levels of financial development and better institutions.
• Household Income As A Determinant of Child Labor and School Enrollment in Brazil: Evidence From A Social Security Reform
  Author/Editor: Carvalho Filho, Irineu E.
  Summary: This paper studies the effects of household income on labor participation and school enrollment of children aged 10 to 14 in Brazil using a social security reform as a source of exogenous variation in household income. Estimates imply that the gap between actual and full school enrollment was reduced by 20 percent for girls living in the same household as an elderly benefiting from the reform. Girls' labor participation rates reduced with increased benefit income, but only when benefits were received by a female elderly. Effects on boys' enrollment rates and labor participation were in general smaller and statistically insignificant.
• International Competitiveness of the Mediterranean Quartet:A Heterogeneous-Product Approach
  Author/Editor: Bennett, Herman Z.; Zarnic, Ziga
  Summary: The real effective exchange rate (REER) is the most commonly used measure for assessing international competitiveness. We develop a methodology to estimate the REER that incorporates two distinctive elements that are not considered in the current literature and apply it to the Mediterranean Quartet (MQ) of Greece, Italy, Portugal, and Spain, whose common pattern of real appreciation has created concern in policy and academic circles. The two elements that we add to the existing literature are (i) product heterogeneity when identifying each country's international competitors and their weights and (ii) a comprehensive treatment of services exports. Our refined measure suggests a modest reduction in the observed REER gap between the MQ countries and the other euro area countries. In particular, considering product heterogeneity and services exports implies a lower real appreciation from 1998 to 2006 on the order of 2-3 percent for all MQ countries. These are differenc!
  e-in-difference estimates relative to the results obtained for the rest of the euro area countries using the same methodology.
• Latin America: Highlights from the Implementation of the System of National Accounts 1993 (1993 SNA)
  Author/Editor: Ramos, Roberto Olinto; Pastor, Gonzalo C.; Rivas, Lisbeth
  Summary: This paper reviews the Latin American experience with the implementation of 1993 SNAand the updating of the national accounts' base year. It also makes a preliminary assessment of the possible estimation biases in nominal GDP estimates stemming from the use of outdated national accounts base years, downwards biases with household final consumption estimates, and an overestimation of gross fixed capital formation in construction activities.
• A Theory of International Crisis Lending and IMF Conditionality
  Author/Editor: Jeanne, Olivier; Ostry, Jonathan D.; Zettelmeyer, Jeromin
  Summary: We present a framework that clarifies the financial role of the IMF, the rationale for conditionality, and the conditions under which IMF-induced moral hazard can arise. In the model, traditional conditionality commits country authorities to undertake crisis resolution efforts, facilitating the return of private capital, and ensuring repayment to the IMF. Nonetheless, moral hazard can arise if there are crisis externalities across countries (contagion) or if country authorities discount crisis costs too much relative to the national social optimum, or both. Moral hazard can be avoided by making IMF lending conditional on crisis prevention efforts-"ex ante" conditionality.
• The Costs of Sovereign Default
  Author/Editor: Borensztein, Eduardo; Panizza, Ugo
  Summary: This paper evaluates empirically four types of cost that may result from an international sovereign default: reputational costs, international trade exclusion costs, costs to the domestic economy through the financial system, and political costs to the authorities. It finds that the economic costs are generally significant but short-lived, and sometimes do not operate through conventional channels. The political consequences of a debt crisis, by contrast, seem to be particularly dire for incumbent governments and finance ministers, broadly in line with what happens in currency crises.
• Growing Apart? A Tale of Two Republics: Estonia and Georgia
  Author/Editor: Gylfason, Thorvaldur; Hochreiter, Eduard
  Summary: We compare and contrast the economic growth performance of Estonia and Georgia since the collapse of the Soviet Union in 1991 in an attempt to understand better the extent to which the growth differential between the two countries can be traced to increased efficiency in the use of capital and other resources (intensive growth) as opposed to brute accumulation of capital (extensive growth). On the basis of a simple growth accounting exercise, we infer that advances in education at all levels, good governance, and institutional reforms have played a more significant role in raising economic output and efficiency in Estonia than in Georgia which remains marred by various problems related to weak governance in the public and private spheres.

World Economics Outlook

• Financial Stress, Downturns, and Recoveries, October 2008
• IMF Global Financial Stability Report -- October 2008
  With financial markets worldwide facing growing turmoil, internationally coherent and decisive policy measures will be required to restore confidence in the global financial system. The process of restoring an orderly system will be challenging, as a significant deleveraging is both necessary and inevitable. It is against this challenging and still evolving backdrop that the October 2008 Global Financial Stability Report frames recent events to suggest potential policy measures that could help address the current circumstances.