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The “traditional structural approach” to the determination of real commodity prices has relied exclusively on demand factors as the fundamentals that explain the behavior of commodity prices. This framework, however, has been unable to explain the marked and sustained weakness in commodity prices during the 1980s and 1990s. This paper extends that framework in two important directions: First, it incorporates commodity supply in the analysis, capturing the impact on prices of the sharp increase in commodity exports of developing countries during the debt crisis of the 1980s. Second, we take a broader view of “world” demand that extends beyond the industrial countries and includes output developments in Eastern Europe and the former Soviet Union (FSU). The empirical results support these extensions, as both the fit of the model improves substantially and, more importantly, its ability to forecast increases markedly.

Commercial products --- Commodities --- Commodity exchanges --- Commodity Markets --- Commodity markets --- Commodity prices --- Currency --- Finance --- Finance: General --- Financial markets --- Foreign Exchange --- Foreign exchange --- General Financial Markets: General (includes Measurement and Data) --- Industrial production --- Industries --- Industries: General --- International Finance: Other --- Investment & securities --- Investments: Commodities --- Macroeconomics --- Macroeconomics: Production --- Prices --- Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) --- Production --- Real exchange rates --- United States

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Brady bonds offer substantially higher returns than Eurobonds. This paper examines the Brady and Eurobond markets for developing country debt and finds that the apparent arbitrage opportunity is not only smaller than it at first appears, but is infeasible given the illiquidity of the Eurobond market. The maturity adjusted return differential between Brady and Eurobonds is smaller than the commonly cited yield spreads. Moreover, the transactions costs of executing a Eurobond short contract render arbitrage a loss-making proposition. Given the many crossover investors who are active in both the Brady and Euro markets, why do Eurobond investors not trade them actively?.

Banks and Banking --- Bond yields --- Bonds --- Capital market --- Finance --- Finance: General --- Financial institutions --- Financial markets --- Financial services --- General Financial Markets: General (includes Measurement and Data) --- Government securities --- Interest rates --- Interest Rates: Determination, Term Structure, and Effects --- International capital markets --- International Finance: Other --- International Financial Markets --- Investment & securities --- Investment Decisions --- Investments: Bonds --- Investments: General --- Portfolio Choice --- Treasury bills and bonds --- Yield curve --- Brazil

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Social protection in industrial countries has been provided through regulations, tax expenditures, and public spending. This paper argues that globalization will affect governments’ ability to continue providing this social protection at the level of recent decades. Specifically, tax competition among jurisdictions, ballooning electronic commerce, and increased mobility of the factors of production will likely cause significant falls in tax revenue in future years. The paper concludes that the welfare states need to look for alternative ways to provide social protection.

Budgeting --- Macroeconomics --- Public Finance --- Globalization --- Global Outlook --- Open Economy Macroeconomics --- International Finance: Other --- National Government Expenditures and Welfare Programs --- Health: Government Policy --- Regulation --- Public Health --- Fiscal and Monetary Policy in Development --- National Government Expenditures and Related Policies: General --- Taxation, Subsidies, and Revenues: Other Sources of Revenue --- Globalization: General --- Aggregate Factor Income Distribution --- Taxation, Subsidies, and Revenue: General --- Public finance & taxation --- Budgeting & financial management --- Expenditure --- Tax expenditures --- Income --- Revenue administration --- Public financial management (PFM) --- National accounts --- Expenditures, Public --- Budget --- Revenue --- United Kingdom

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This paper investigates the extent to which output has recovered from the Asian crisis. A regime-switching approach that introduces two state variables is used to decompose recessions in a set of six Asian countries into permanent and transitory components. While growth recovered fairly quickly after the crisis, there is evidence of permanent losses in the levels of output in all of the countries studied.

Financial Risk Management --- Macroeconomics --- International Finance: Other --- Open Economy Macroeconomics --- International Policy Coordination and Transmission --- Macroeconomic Aspects of International Trade and Finance: Other --- Time-Series Models --- Dynamic Quantile Regressions --- Dynamic Treatment Effect Models --- Diffusion Processes --- State Space Models --- International Financial Markets --- Macroeconomics: Consumption --- Saving --- Wealth --- Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) --- Financial Crises --- Economic growth --- Economic & financial crises & disasters --- Consumption --- Business cycles --- Financial crises --- National accounts --- Economics --- Hong Kong Special Administrative Region, People's Republic of China

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Post-crisis dynamics show a shrinkage in the overall amount of crossborder bank lending, which has been interpreted in the literature as a retreat in financial globalization. In this paper, we argue that aggregate figures are not sufficient to support such a claim in terms of the overall structure of the global banking network. Based on a systematic approach to measuring, mapping and analyzing financial interconnectedness among countries using network theory, we show that, despite the decline in aggregate lending volumes, the structure of the network has developed increased connections in some dimensions. Some parts of the network are currently more interlinked regionally than before the crisis, and less dependent on major global lenders. In this context, at a more disaggregate level, we document the characteristics of the increasing regionalization of lending flows, the different evolution of linkages through bank affiliates and direct cross-border claims, as well as the shift in the importance of key borrower and lender nodes. These changes in the banking network have important insights in terms of policy implications since they indicate that the global banking network has evolved, but it has not undergone a generalized retrenchment in financial linkages.

Banks and Banking --- Statistics --- International Lending and Debt Problems --- Financial Aspects of Economic Integration --- International Finance: Other --- International Financial Markets --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Data Collection and Data Estimation Methodology --- Computer Programs: Other --- Banking --- Econometrics & economic statistics --- Offshore financial centers --- International banking --- Cross-border banking --- Foreign banks --- Financial services --- Financial institutions --- Financial statistics --- Economic and financial statistics --- Banks and banking --- International finance --- Banks and banking, Foreign --- Finance --- United States