Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.

Currencies --- Currency --- Deflation --- Economic sectors --- Exchange rates --- Export prices --- Exports and Imports --- Exports --- Foreign Exchange --- Foreign exchange --- Government and the Monetary System --- Industries: Manufacturing --- Industry Studies: Manufacturing: General --- Inflation --- International economics --- International trade --- Macroeconomics --- Manufacturing industries --- Manufacturing --- Monetary economics --- Monetary Systems --- Money and Monetary Policy --- Money --- Payment Systems --- Price Level --- Prices --- Regimes --- Standards --- Trade: General --- United Kingdom

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

The U.K. monetary policy framework, which combines inflation targeting with operational independence, provides a suitable arrangement for focused and credible monetary policy. However, potential weaknesses could result from features that have not yet been fully tested: the credibility and transparency of the inflation forecasts, which form the core of policy decisions, have diminished as a result of independence; and the framework could encourage excessive activism and frequent changes in interest rates. Although policy coordination could also suffer from independence, the new partly rules-based fiscal and monetary regimes will promote overall macroeconomic stability.

Banks and Banking --- Inflation --- Money and Monetary Policy --- Public Finance --- Monetary Policy --- Price Level --- Deflation --- Central Banks and Their Policies --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Fiscal Policy --- Monetary economics --- Macroeconomics --- Banking --- Inflation targeting --- Central bank autonomy --- Fiscal policy --- Monetary policy --- Prices --- Central banks --- Monetary policy frameworks --- Banks and banking --- United Kingdom

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper presents an empirical examination of the importance of hysteresis in international trade. An econometric model of export determination is developed where the presence of sunk costs causes discontinuous behavior and hysteresis so that individual exporters’ decision to stay in or out of the market depends on the current value of the exchange rate as well as its past history. The aggregate level of exports is then determined by the proportion of exporters that stay in the market. The resulting non-linear model is estimated using data on manufacturing exports for the United States, Germany, and Japan. The paper finds strong evidence in favor of the presence of pricing-to-market and hysteresis only in the case of Japanese exports.

Exports and Imports --- Foreign Exchange --- Macroeconomics --- Money and Monetary Policy --- Trade: General --- Price Level --- Inflation --- Deflation --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Currency --- Foreign exchange --- International economics --- Monetary economics --- Exchange rates --- Exports --- Export prices --- Exchange rate adjustments --- Currencies --- International trade --- Prices --- Money --- United States

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

In the context of the U.K. government’s EMU entry condition of cyclical convergence, this paper (i) provides further evidence suggesting that historically the U.K.’s business cycle has been more volatile than, and relatively independent of, the cycles in the euro-area countries; and (ii) identifies, using a small VAR model, a relatively significant role for monetary policy in explaining these differences. A simulation exercise suggests that if the U.K. interest rates had been more closely aligned with those in the euro area in the 1990s (as they would be if the United Kingdom were to join EMU), output growth might have been less volatile and more correlated with that in the euro area, but inflationary pressures might have persisted.

Foreign Exchange --- Inflation --- Macroeconomics --- Production and Operations Management --- Business Fluctuations --- Cycles --- Prices, Business Fluctuations, and Cycles: Forecasting and Simulation --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- International Economic Order and Integration --- Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) --- Price Level --- Deflation --- Macroeconomics: Production --- Economic growth --- Currency --- Foreign exchange --- Business cycles --- Exchange rates --- Real effective exchange rates --- Output gap --- Prices --- Production --- Economic theory --- United Kingdom

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper discusses three important extensions to the developing country scenario and adjustment model used in the World Economic Outlook exercises. First, the model is augmented to include fiscal and monetary sectors and now explicitly captures links among government policy, investment, output and inflation. Second, the external sector is modified to allow domestic demand factors to influence imports, as well as allowing flexibility in the financing of imports. Third, the model system is extended to the group of net-creditor countries, and for the oil exporters within this group, oil exports are modeled separately. The revised model is estimated for each of the 95 developing countries and parameter estimates for each of the main equations are presented. The paper also reports the results of four simulation exercises to illustrate how the new model system may be used to quantify the effects of changes in domestic policies and in the external environment.

Exports and Imports --- Macroeconomics --- Money and Monetary Policy --- Trade: General --- Current Account Adjustment --- Short-term Capital Movements --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Fiscal Policy --- Model Construction and Estimation --- General Aggregative Models: Forecasting and Simulation --- International economics --- Monetary economics --- Imports --- Current account balance --- Monetary base --- Exports --- Fiscal stance --- International trade --- Balance of payments --- Money --- Fiscal policy --- Money supply --- Taiwan Province of China