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This paper presents an overview of Argentina’s economic developments in the past 10 years. Argentina’s impressive growth over the past decade has been accompanied by the accumulation of a number of major vulnerabilities. Policy inconsistencies were exposed in early 2014 when mounting balance-of-payments pressures culminated in a sharp devaluation of the peso. Subsequent to the devaluation, domestic imbalances were exacerbated by a deteriorating external environment. At the same time, the dispute with holdout creditors continued to impede Argentina’s access to international capital markets. The combination of weak external demand, fast eroding competitiveness, and compromised access to international capital markets fueled balance of payments pressures in 2014.

Foreign Exchange --- Inflation --- Money and Monetary Policy --- Price Level --- Deflation --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Currency --- Foreign exchange --- Macroeconomics --- Monetary economics --- Exchange restrictions --- Exchange rates --- Currencies --- Prices --- Money --- Argentina

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Economic development --- Gross domestic product --- Deflation (Finance) --- Econometric models. --- Disinflation --- Finance --- Domestic product, Gross --- GDP --- Gross national product --- Development, Economic --- Economic growth --- Growth, Economic --- Economic policy --- Economics --- Statics and dynamics (Social sciences) --- Development economics --- Resource curse

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This paper analyzes food inflation trends in Sub-Saharan Africa (SSA) from 2000 to 2016 using two novel datasets of disaggregated CPI baskets. Average food inflation is higher, more volatile, and similarly persistent as non-food non-fuel (NF/NF) inflation, especially in low-income countries (LICs) in SSA. We find evidence that food inflation became less persistent from 2009 onwards, related to recent improvements in monetary policy frameworks. We also find that high food prices are driven mainly by non-tradable food in SSA and there is incomplete pass-through from world food and fuel prices and exchange rates to domestic food prices. Taken together, these finding suggest that central banks in low-income countries with high and persistent food inflation should continue to pay attention to headline inflation to anchor inflation expectations. Other policy levers include reducing tariffs and improving storage and transport infrastructure to reduce food pressures.

Food prices --- Inflation (Finance) --- Finance --- Natural rate of unemployment --- Food --- Agricultural prices --- Food industry and trade --- Prices --- E-books --- Food prices. --- Foreign Exchange --- Inflation --- Macroeconomics --- Price Level --- Deflation --- Central Banks and Their Policies --- Trade: Other --- Agriculture: Aggregate Supply and Demand Analysis --- Commodity Markets --- Currency --- Foreign exchange --- Inflation persistence --- Exchange rates --- Commodity price shocks --- China, People's Republic of

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This paper analyzes the use of unconventional policy instruments in New Keynesian setups in which the ‘divine coincidence’ breaks down. The paper discusses the role of a second instrument and its coordination with conventional interest rate policy, and presents theoretical results on equilibrium determinacy, the inflation bias, the stabilization bias, and the optimal central banker’s preferences when both instruments are available. We show that the use of an unconventional instrument can help reduce the zone of equilibrium indeterminacy and the volatility of the economy. However, in some circumstances, committing not to use the second instrument may be welfare improving (a result akin to Rogoff (1985a) example of counterproductive coordination). We further show that the optimal central banker should be both aggressive against inflation, and interventionist in using the unconventional policy instrument. As long as price setting depends on expectations about the future, there are gains from establishing credibility by using any instrument that affects these expectations.

Banks and Banking --- Inflation --- Economic Theory --- Production and Operations Management --- Monetary Policy --- Central Banks and Their Policies --- Foreign Exchange --- Price Level --- Deflation --- Macroeconomics: Production --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Wicksellian) --- Financial Economics --- Macroeconomics --- Economic theory & philosophy --- Banking --- Output gap --- Neoclassical theory --- Financial frictions --- Prices --- Production --- Economic theory --- Banks and banking --- Neoclassical school of economics --- Economic forecasting

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Motivated by stylized facts pointing to a dominant role of imported inputs in transmitting external price shocks to domestic prices, this paper zooms in to study the pass-through of imported input costs to domestic producer prices. Our approach constructs effective input price indices from sector-level price data combined with sector-level information on input-output linkages. Applying an error correction model specification to sector-level output and input prices, the long-run pass-through rate of effective imported input costs to domestic producer prices is estimated to be around 70 percent in Korea and almost 100 percent in selected European countries.

Imports --- Consumer goods --- Inflation (Finance) --- Exchange rate pass-through --- Foreign exchange rate pass-through --- Pass-through of exchange rates --- Prices --- Finance --- Natural rate of unemployment --- Consumer products --- Consumers' goods --- Goods, Consumer --- Commercial products --- International trade --- Prices&delete& --- Econometric models --- E-books --- Inflation --- Macroeconomics --- Price Level --- Deflation --- Producer prices --- Import prices --- Producer price indexes --- Import price indexes --- Price indexes --- Korea, Republic of