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This paper examines some recent techniques designed to draw inferences about the credibility of changes in macroeconomic policy regimes. An alternative two-step approach, based on the decomposition between permanent and transitory components of a "credibility variable" is proposed. The methodology is then used to test for the existence of a credibility effect in the Cruzado stabilization plan implemented in Brazil in 1986.

Foreign Exchange --- Inflation --- Macroeconomics --- Public Finance --- Price Level --- Deflation --- Debt --- Debt Management --- Sovereign Debt --- Currency --- Foreign exchange --- Public finance & taxation --- Price controls --- Exchange rates --- Government debt management --- Prices --- Public financial management (PFM) --- Government policy --- Debts, Public --- Argentina

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This paper consolidates previous work on the development of secondary markets for government securities, and focuses on the sequencing of measures necessary for their development. Six main lessons are identified: (i) a commitment to achieving and maintaining a stable macroeconomic environment, especially prudent fiscal policy, should underpin market development; (ii) a sound and transparent public debt management strategy supports secondary market activity; (iii) a deep and diverse investor base is required; (iv) poor market infrastructure leads to high transaction costs, slow order execution, and excessive operational risk, which all inhibit trading; (v) secondary market growth is facilitated by effective monetary policy implementation; and (vi) reforms should be sequenced to ensure even development of all the structures supporting the secondary market.

Government securities. --- Secondary markets. --- Government agency securities --- Government bonds --- Public securities --- Treasuries (Securities) --- Treasury bonds --- Markets --- Bonds --- Debts, Public --- Securities --- Finance: General --- Investments: General --- Public Finance --- General Financial Markets: General (includes Measurement and Data) --- Debt --- Debt Management --- Sovereign Debt --- Investment & securities --- Finance --- Public finance & taxation --- Government securities --- Securities markets --- Government debt management --- Public debt --- Capital market --- Financial instruments --- Mexico

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While the “dependent economy” approach has been used extensively in theoretical work on developing countries, there is very little empirical analysis of it available in the literature. This paper specifies a dependent economy model which incorporates several developing-country features, including an explicit role for public investment and legal interest rate ceilings. The model is estimated for Pakistan and is used to analyze the country’s recent high growth-low inflation experience. In particular, the contribution that external inflows, in the form of workers’ remittances and concessional lending, may have made in generating this outcome is assessed.

Foreign Exchange --- Macroeconomics --- Public Finance --- Model Construction and Estimation --- Fiscal Policy --- Macroeconomic Analyses of Economic Development --- Macroeconomics: Consumption --- Saving --- Wealth --- Debt --- Debt Management --- Sovereign Debt --- Currency --- Foreign exchange --- Public finance & taxation --- Real exchange rates --- Consumption --- Government consumption --- Private consumption --- Government debt management --- National accounts --- Public financial management (PFM) --- Economics --- Debts, Public --- Pakistan

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A regional convergence pact adopted recently by the Conference of Heads of States of WAEMU provides a framework for fiscal convergence similar to the European Union’s Maastricht Treaty. Using bivariate co-integration and error-correction models, this paper investigates the relationship between revenue and expenditure in seven member countries to determine the feasibility and nature of the policy adjustment required to meet the new convergence criteria. The results indicate that, in the long run, there is causality running from revenue to expenditure in Burkina Faso and Senegal, from expenditure to revenue in Benin and Togo, a bidirectional causality in Côte d’Ivoire and Mali, and no causality in Niger.

Budgeting --- Macroeconomics --- Public Finance --- History of Thought: Macroeconomics --- Hypothesis Testing --- Estimation --- Fiscal Policy --- National Government Expenditures and Related Policies: General --- National Budget --- Budget Systems --- Debt --- Debt Management --- Sovereign Debt --- Public finance & taxation --- Budgeting & financial management --- Expenditure --- Budget planning and preparation --- Government debt management --- Fiscal stance --- Fiscal policy --- Public financial management (PFM) --- Expenditures, Public --- Budget --- Debts, Public --- Niger

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This paper reviews lessons in fiscal consolidation for the former Soviet Union that emerge from the experience of Central and Eastern European economies in transition. A central lesson is the need to support the macroeconomic stabilization with a front-loaded fiscal adjustment. Consistent with this adjustment path, structural reform in the tax and expenditure areas should be aimed at allocative efficiency and fairness, and its sequencing be predicated largely on administrative constraints. In the face of the uncertainty of fiscal projections, formulation of contingency measures is necessary. In addition, elimination of submerged fiscal imbalances, stemming from quasi-fiscal activities of state-owned nonfinancial enterprises and financial institutions, is just as important as correcting the measured budget deficit.

Budgeting --- Macroeconomics --- Public Finance --- Fiscal Policy --- Socialist Institutions and Their Transitions: Public Economics --- National Budget --- Budget Systems --- National Government Expenditures and Related Policies: General --- Debt --- Debt Management --- Sovereign Debt --- Public finance & taxation --- Budgeting & financial management --- Budget planning and preparation --- Expenditure --- Government debt management --- Fiscal policy --- Fiscal consolidation --- Public financial management (PFM) --- Budget --- Expenditures, Public --- Debts, Public --- Hungary