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This paper explores the macroeconomic impacts of labor and product market deregulation using a small open-economy model with formal and informal markets. We examine both the long-run effects and the transition towards the post-reform equilibrium, while our main focus are reform packages and sequencing. The unofficial sector is a major determinant of the sign, and, in particular, the magnitude of responses. South Africa, an emerging country, is considered when Bayesian estimating the model. Regarding the long run, both labor and product market reforms considerably increase output, although labor market reforms are more successful in decreasing unemployment. Nevertheless, there are short-term costs, for example, a decrease in household consumption, net exports or output, or a decrease in competition. Combining reforms, especially with product market deregulation, are good at reducing short-term costs. Finally, concerning the speed of adjustment, it is usually better to start with a labor market reform.

Informal sector (Economics) --- Hidden economy --- Parallel economy --- Second economy --- Shadow economy --- Subterranean economy --- Underground economy --- Artisans --- Economics --- Small business --- E-books --- Finance: General --- Labor --- Informal Economy --- Underground Econom --- Labor Economics Policies --- Wages, Compensation, and Labor Costs: General --- General Financial Markets: General (includes Measurement and Data) --- Unemployment: Models, Duration, Incidence, and Job Search --- Demand and Supply of Labor: General --- Employment --- Unemployment --- Wages --- Intergenerational Income Distribution --- Aggregate Human Capital --- Aggregate Labor Productivity --- Labour --- income economics --- Finance --- Commodity markets --- Labor market reforms --- Labor markets --- Financial markets --- Commodity exchanges --- Manpower policy --- Labor market --- Economic theory --- South Africa --- Income economics

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This paper examines the pattern of excess liquidity in sub-Saharan Africa and its consequences for the effectiveness of monetary policy. The paper argues that understanding the consequences of excess liquidity requires quantifying the extent to which commercial bank holdings of excess liquidity exceed levels required for precautionary purposes. It proposes a methodology for measuring this quantity and uses it to estimate a nonlinear structural VAR model for the CEMAC region, Nigeria and Uganda. The study suggests that excess liquidity weakens the monetary policy transmission mechanism and thus the ability of monetary authorities to influence demand conditions in the economy.

Electronic books. -- local. --- Liquidity (Economics) -- Econometric models. --- Monetary policy -- Africa, Sub-Saharan -- Econometric models. --- Finance --- Business & Economics --- Money --- Monetary policy --- Liquidity (Economics) --- Econometric models. --- Assets, Frozen --- Frozen assets --- Monetary management --- Economic policy --- Currency boards --- Money supply --- Banks and Banking --- Finance: General --- Money and Monetary Policy --- Portfolio Choice --- Investment Decisions --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Monetary Policy --- Banking --- Monetary economics --- Excess liquidity --- Commercial banks --- Reserve requirements --- Monetary transmission mechanism --- Liquidity --- Economics --- Banks and banking --- Nigeria

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During the first half of 2008, Sri Lanka witnessed significantly higher inflation than most other emerging Asian countries. Inflation has since declined amid declining world commodity prices and tight monetary policy. Given the sensitivity to global commodity prices, a core inflation measure could be useful for monetary policy. The purpose of this paper is to compare the performance of Sri Lanka's existing official measure of core inflation against alternative measures. Our findings suggest that the existing measure does contain information about the future path of headline information, but may be inadequate as a communication tool for the Central Bank.

Finance --- Business & Economics --- Money --- Inflation (Finance) --- Monetary policy --- Monetary management --- Economic policy --- Currency boards --- Money supply --- Natural rate of unemployment --- Inflation --- Macroeconomics --- Econometric Modeling: General --- Price Level --- Deflation --- Monetary Policy --- Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) --- Agriculture: Aggregate Supply and Demand Analysis --- Prices --- Energy: Demand and Supply --- Economic growth --- Consumer price indexes --- Cyclical indicators --- Food prices --- Fuel prices --- Price indexes --- Business cycles --- Sri Lanka

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This paper evaluates monetary policy-tradeoffs in low-income countries using a dynamic stochastic general equilibrium (DSGE) model estimated on data for Mozambique taking into account the sources of major exogenous shocks, and level of financial development. To our knowledge this is a first attempt at estimating a DSGE model for Sub-Saharan Africa excluding South Africa. Our simulations suggests that a exchange rate peg is significantly less successful than inflation targeting at stabilizing the real economy due to higher interest rate volatility, as in the literature for industrial countries and emerging markets.

Banks and Banking --- Foreign Exchange --- Inflation --- Money and Monetary Policy --- Monetary Policy --- Price Level --- Deflation --- Central Banks and Their Policies --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Monetary economics --- Macroeconomics --- Currency --- Foreign exchange --- Banking --- Inflation targeting --- Exchange rates --- Open market operations --- Monetary base --- Monetary policy --- Prices --- Money supply --- Mozambique, Republic of --- Equilibrium (Economics) --- Econometric models.

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This paper reviews Latvia’s efforts to manage the increase in debt distress resulting from the unwinding of the 2000-07 credit boom and spillovers from the global financial crisis. The authorities have designed a strategy that strengthens incentives for marked-based debt resolution by improving the legal framework for credit enforcement, introducing tax incentives for debt write-downs, and strengthening financial sector supervision. These measures have started to yield results, but further steps are needed to speed up bankruptcy procedures and reduce credit enforcement costs. Latvia’s experience with market-based debt resolution may provide insights on managing debt distress in other countries with limited fiscal resources.

Debt relief --- Debt --- Corporate debt --- Households --- Population --- Families --- Home economics --- Corporations --- Debt financing (Corporations) --- Indebtedness --- Finance --- Debt renegotiation --- Debt rescheduling --- Debt restructuring --- Relief, Debt --- Renegotiation, Debt --- Rescheduling, Debt --- Restructuring, Debt --- Debtor and creditor --- Law and legislation --- Banks and Banking --- Finance: General --- Financial Risk Management --- Public Finance --- Industries: Financial Services --- Debt Management --- Sovereign Debt --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Bankruptcy --- Liquidation --- Banking --- Public finance & taxation --- Loans --- Public debt --- Solvency --- Debts, External --- Banks and banking --- Debts, Public --- Latvia, Republic of