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The development of empirical foundations to the conduct of monetary policy in Tunisia is the central concern of this paper. Finding stable money demand functions, it broadly corroborates the choice of monetary aggregates as intermediate targets of monetary policy by the Tunisian Central Bank. It finds, however, a lower income elasticity than the one currently applied by the Central Bank and proposes a different methodology for defining monetary growth targets. The paper also finds that both interest rates and reserve money are feasible operating targets and suggests that the Central Bank orients its monetary policy more towards transparent operating targets.

Banks and Banking --- Investments: General --- Money and Monetary Policy --- Macroeconomics --- Model Evaluation and Selection --- Demand for Money --- Monetary Policy --- Economic History: Macroeconomics --- Growth and Fluctuations: Asia including Middle East --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- General Financial Markets: General (includes Measurement and Data) --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Personal Income, Wealth, and Their Distributions --- Monetary economics --- Investment & securities --- Banking --- Monetary base --- Demand for money --- Treasury bills and bonds --- Monetary aggregates --- Money --- Financial institutions --- Personal income --- National accounts --- Money supply --- Government securities --- Banks and banking --- Income --- Tunisia

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This paper assesses the effectiveness of stabilization policies and structural reforms in Albania since 1997 and seeks to identify the remaining key challenges in various policy areas. It also draws lessons for other transition economies from the recent Albanian experience. While progress has been made toward macroeconomic stability and the establishment of a modern institutional framework, much remains to be done to enhance the sustainability of the recent favorable macroeconomic performance and reduce unemployment and poverty. Crucial areas of reform are the creation of functioning institutions, notably in the judicial field, and the establishment of a reliable supply of electricity, which has recently become an obstacle for rapid growth.

Exports and Imports --- Inflation --- Macroeconomics --- Public Finance --- Policy Objectives --- Policy Designs and Consistency --- Policy Coordination --- Studies of Particular Policy Episodes --- Taxation, Subsidies, and Revenue: General --- National Government Expenditures and Related Policies: General --- Remittances --- Price Level --- Deflation --- Comparison of Public and Private Enterprises and Nonprofit Institutions --- Privatization --- Contracting Out --- Public finance & taxation --- International economics --- Revenue administration --- Expenditure --- Balance of payments --- Prices --- Economic sectors --- Revenue --- Expenditures, Public --- International finance --- Albania

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This paper applies the Growth Identification and Facilitation Framework developed by Lin and Monga (2010) to Nigeria. It identifies as appropriate comparator countries China, India, Indonesia, and Vietnam, and selects a wide range of industries in which these comparator countries may be losing their comparative advantage and which may therefore lend themselves to targeted interventions of the government to fast-track growth. These industries include food processing, light manufacturing, suitcases, shoes, car parts, and petrochemicals. The paper also discusses binding constraints to growth in each of these value chains as well as mechanisms through which governance-related issues in the implementation of industrial policy could be addressed.

E-Business --- Economic Theory & Research --- Employment intensity --- Environmental Economics & Policies --- Facilitation framework --- Growth identification --- Growth performance --- Labor Policies --- Macroeconomics and Economic Growth --- Technological innovation --- Transport Economics Policy & Planning

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The simmering sovereign debt crisis in the Euro Zone represents a looming threat to the recovery of the world economy and could lead to a renewed global financial crisis. The purpose of this paper is to analyze the root causes of the crisis in Europe and assess the extent to which it was driven by the global financial crisis and by factors internal to Europe, notably the adoption of the common currency. Adoption of the euro led to convergence of interest rates in periphery countries to the levels in core countries and, in combination with rising capital inflows owing to greater financial integration, set off a consumption and real estate boom in periphery countries, leading to higher growth and increases in government revenue and spending. The resulting real appreciation led to a loss of competitiveness in periphery countries, adversely affecting export performance and causing rising current account imbalances. While the fiscal position remained manageable before the crisis owing to rising revenue, the recession brought about by the global financial crisis led to the burst of real estate bubbles and a financial sector crisis and to sharply increased budget deficits and worsened debt indicators and triggered the sovereign debt crisis. Core countries, in particular Germany, maintained a competitive edge through wage restraint allowing them to increase exports to periphery countries, while their banks profited from increased lending to non-core countries. In sum, the euro exacerbated intra-European imbalances whose unsustainability became evident in the aftermath of the global financial crisis and triggered the current sovereign debt crisis.

Access to Finance --- Adoption of Euro --- Banks & Banking Reform --- Currencies and Exchange Rates --- Debt Markets --- Emerging Markets --- Financial integration --- Global financial crisis --- Macroeconomics and Economic Growth --- Real estate bubble --- Sovereign debt crisis in Europe

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The world is currently still struggling with the aftermath of the worst economic crisis since the Great Depression. Following a description of the eruption, evolution and consequences of the global crisis, this paper reviews alternative hypotheses for the causes of the global financial crisis as well as their empirical evidence. The paper refutes the frequently voiced view that the global crisis was caused by global imbalances that reflected economic policies of East Asian countries. Instead, it argues that global imbalances were the result of excess demand in the United States, resulting from both the public debt in the United States arising from the Afghanistan and Iraqi wars and tax cuts and the overconsumption by households supported by the wealth effect from the housing bubble in the United States. The housing bubble itself was the outcome of the Federal Reserve's low interest rate policy in the aftermath of the burst of the "dot-com" bubble in 2001, the lack of appropriate financial regulation, and housing policies aimed at expanding the mortgage market to low-income borrowers. It was possible to maintain the large trade deficits of the United States for such a long period of time because of the dollar's reserve currency status. When the housing bubble in the United States burst, the global crisis ensued. The paper also analyzes why China's trade surplus increased significantly in general and with the United States in particular in recent years, and argues that this increase was caused by both the relocation of the labor-intensive tradable sector of East Asian economies to China and high corporate saving rates in China as a result of its dual-track approach to reform.

Access to Finance --- China's trade surplus --- Currencies and Exchange Rates --- Debt Markets --- Economic Theory & Research --- Emerging Markets --- Finance and Financial Sector Development --- Financial sector deregulation --- Global financial crisis --- Macroeconomics and Economic Growth --- Real estate bubble