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This paper surveys recent economic developments in countries in the African Department. In the aggregate, output growth continues to be sluggish, and it is expected that half of the countries will experience a declining income per capita in 1993. However, structural adjustment is making fast progress, especially as regards the liberalization of exchange and credit markets. This bodes well for an eventual improvement in economic performance.

Banks and Banking --- Exports and Imports --- Foreign Exchange --- Trade: General --- Interest Rates: Determination, Term Structure, and Effects --- Currency --- Foreign exchange --- International economics --- Finance --- Exchange rate arrangements --- Exports --- Real interest rates --- International trade --- Financial services --- Interest rates --- Cameroon

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This paper provides a monetary model with nominal rigidities that differs from the conventional New Keynesian model with firms setting pricing policies instead of price levels. In response to permanent or highly persistent monetary policy shocks this model generates the empirically observed slow (inertial) and prolonged (persistent) reaction of the inflation rate, and also the recession that typically accompanies moderate disinflations. The reason is that firms respond to such shocks mostly through a change in the long-run or inflation updating component of their pricing policies. With staggered pricing policies there is a time lag before this is reflected in aggregate inflation.

Banks and Banking --- Inflation --- Macroeconomics --- Price Level --- Deflation --- Monetary Policy --- Open Economy Macroeconomics --- Interest Rates: Determination, Term Structure, and Effects --- Finance --- Disinflation --- Real interest rates --- Inflation persistence --- Sticky prices --- Prices --- Interest rates --- United States

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This paper estimates the evolution of equilibrium real home prices in the United States and finds that despite recent declines, single-family homes remained 8 to 20 percent overvalued as of the first quarter of 2008. In the short run, the gap between actual and equilibrium prices does not exert powerful influence over price dynamics. Instead, that dynamics is driven by the inventory-to-sales ratio and by foreclosure starts in a highly inertial relationship. Taken together, this implies that price declines are likely to continue, including past the point where overvaluation is eliminated. The paper also finds that from the early 1990s onwards changes in regional home prices have been more synchronized than before, and that the recent movements in the average price index have reflected a nationwide housing boom, followed by a nationwide housing bust.

Housing --- Prices --- Banks and Banking --- Infrastructure --- Labor --- Macroeconomics --- Real Estate --- Housing Supply and Markets --- Price Level --- Inflation --- Deflation --- Economic Development: Urban, Rural, Regional, and Transportation Analysis --- Interest Rates: Determination, Term Structure, and Effects --- Unemployment: Models, Duration, Incidence, and Job Search --- Property & real estate --- Finance --- Labour --- income economics --- Housing prices --- Asset prices --- Real interest rates --- Unemployment rate --- Saving and investment --- Interest rates --- Unemployment --- United States

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This paper presents a model of current account determination, based upon the permanent-income hypothesis. A present-value relationship among the current account, changes in net output, the exchange rate and the terms of trade is derived and the implications of such a relationship are tested using data for Nigeria during 1960-97. This paper presents a model of current account determination, based upon the permanent-income hypothesis. A present-value relationship among the current account, changes in net output, the exchange rate and the terms of trade is derived and the implications of such a relationship are tested using data for Nigeria during 1960-97.

Banks and Banking --- Exports and Imports --- Macroeconomics --- Current Account Adjustment --- Short-term Capital Movements --- Open Economy Macroeconomics --- Macroeconomics: Consumption --- Saving --- Wealth --- Empirical Studies of Trade --- Interest Rates: Determination, Term Structure, and Effects --- International economics --- Finance --- Current account --- Consumption --- Terms of trade --- Current account balance --- Real interest rates --- Balance of payments --- National accounts --- International trade --- Financial services --- Economics --- Economic policy --- nternational cooperation --- Interest rates --- Nigeria

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Using data on long-term interest rates for 17 industrial countries, this paper develops some simple measures of monetary policy credibility and then tests if such measures improve the out-of-sample forecasts of conventional models of the inflation-unemployment process. The results provide some evidence in favor of the Lucas critique by showing that the short-run unemployment-inflation trade-off tends to improve in countries that are successful in providing low and stable inflation.

Banks and Banking --- Inflation --- Labor --- Money and Monetary Policy --- Model Construction and Estimation --- Price Level --- Deflation --- Monetary Policy --- Interest Rates: Determination, Term Structure, and Effects --- Unemployment: Models, Duration, Incidence, and Job Search --- Macroeconomics --- Finance --- Labour --- income economics --- Monetary economics --- Unemployment --- Real interest rates --- Long term interest rates --- Inflation targeting --- Prices --- Financial services --- Monetary policy --- Interest rates --- United Kingdom