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This paper analyzes the relationship between fiscal adjustment and real GDP growth in a panel of 26 transition economies during 1992-2001. Unlike most previous studies using cross-country regressions, the paper finds a positive and statistically significant relationship between fiscal adjustment and growth that is robust to different model specifications and estimation methods. The paper also presents country experiences to delve deeper into the mechanisms that may underlie this statistical relationship.

Economic stabilization -- Developing countries. --- Electronic books. -- local. --- Fiscal policy -- Developing countries. --- Business & Economics --- Economic History --- Economic stabilization --- Fiscal policy --- Macroeconomics --- Public Finance --- Fiscal Policy --- Debt --- Debt Management --- Sovereign Debt --- Institutions and the Macroeconomy --- Public finance & taxation --- Fiscal consolidation --- Government debt management --- Fiscal stance --- Structural reforms --- Debts, Public --- Russian Federation

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This paper compares the importance of precautionary and mercantilist motives in the hoarding of international reserves by developing countries. Overall, empirical results support precautionary motives; in particular, a more liberal capital account regime increases international reserves. Theoretically, large precautionary demand for international reserves arises as a self-insurance to avoid costly liquidation of long-term projects when the economy is susceptible to sudden stops. The welfare gain from the optimal management of international reserves is of a first-order magnitude, reducing the welfare cost of liquidity shocks from a first-order to a second-order magnitude.

Developing countries -- Economic policy. --- Electronic books. -- local. --- Fiscal policy -- Developing countries -- Econometric models. --- Banks and Banking --- Exports and Imports --- Finance: General --- Monetary Policy --- Portfolio Choice --- Investment Decisions --- Trade: General --- Current Account Adjustment --- Short-term Capital Movements --- Banking --- Finance --- International economics --- International reserves --- Liquidity --- Reserves accumulation --- Export performance --- Capital account liberalization --- Foreign exchange reserves --- Economics --- Exports --- Balance of payments --- China, People's Republic of

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We analyze the effects of macroprudential policies through the lens of an estimated dynamic stochastic general equilibrium (DSGE) model tailored to developing markets. In particular, we explicitly introduce informality in the labor and goods markets within a small open economy embedding financial frictions, nominal and real rigidities, labor search and matching, and an explicit banking sector. We use the estimated version of the model to run welfare analysis under optimized monetary and macroprudential rules. Results show that although informality reduces the efficiency of macroprudential policies following a convex fashion, combining the latter with an inflation targeting objective could be beneficial.

Fiscal policy--Developing countries. --- Monetary policy--Mathematical models. --- Developing countries--Economic policy. --- Banks and Banking --- Infrastructure --- Labor --- Macroeconomics --- Financial Markets and the Macroeconomy --- Labor Demand --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Macroeconomics: Consumption --- Saving --- Wealth --- Economic Development: Urban, Rural, Regional, and Transportation Analysis --- Housing --- Labor Economics: General --- Labour --- income economics --- Banking --- Macroprudential policy --- Self-employment --- Consumption --- Financial sector policy and analysis --- National accounts --- Economic policy --- Self-employed --- Banks and banking --- Economics --- Saving and investment --- Labor economics --- Tunisia

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This paper applies stochastic simulation methods to assess debt sustainability in emerging market economies and provide probability measures for projections of the external and public debt burden over the medium term. The vulnerability of public debt to adverse shocks is determined by a number of interrelated factors, including the volatility of output, financial fragility, the endogenous response of the risk premium, and sudden stops in private capital flows. The vulnerability of external debt is sensitive to the determination of the exchange rate and to the pricing of traded goods. We show that fiscal policy can act in a preemptive manner to prevent the debt burden from rising significantly over the medium term. This requires flexibility in fiscal planning, which many emerging market economies lack. Emerging market economies therefore face a difficult trade-off between managing the risk of a debt crisis and pursuing other important fiscal policy objectives.

Capital movements -- Developing countries. --- Debts, External -- Developing countries. --- Electronic books. -- local. --- Fiscal policy -- Developing countries. --- Stochastic analysis. --- Exports and Imports --- Finance: General --- Investments: General --- Public Finance --- International Lending and Debt Problems --- Debt --- Debt Management --- Sovereign Debt --- Investment --- Capital --- Intangible Capital --- Capacity --- General Financial Markets: General (includes Measurement and Data) --- International economics --- Public finance & taxation --- Macroeconomics --- Finance --- Public debt --- External debt --- Debt burden --- Return on investment --- Emerging and frontier financial markets --- Debts, External --- Debts, Public --- Saving and investment --- Financial services industry --- United States

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Based on the experience of budget management reforms that have been introduced over the last two decades in a large number of member countries of the Organization for Economic Cooperation and Development (OECD) it is not uncommon to find emerging market economies moving toward performance-based budgeting where measures of performance play a key role. While it might be tempting for middle income countries to press forward to adopt a full-blown outputs and outcomes framework, there are some risks in the move. Such a change in orientation is only possible once managers have had adequate experience in refining the definition of programs and their objectives, and on this basis developing a comprehensive system of performance measurement. It is argued in this paper that to develop a comprehensive performance measurement system requires resolving a number of issues involved in clearly defining how to measure "performance" as well as overcoming a number of technical issues in the design and use of measures of that "performance." However, perhaps the most critical step is introducing a system whereby performance information can influence resource allocation decisions, i.e., establishing a performance management system. Based on international experience, this paper reviews each of these hurdles in moving toward a performance management framework.

Developing countries -- Appropriations and expenditures. --- Electronic books. -- local. --- Fiscal policy -- Developing countries. --- Performance -- Measurement. --- Budgeting --- Macroeconomics --- Public Finance --- National Budget --- Budget Systems --- National Budget, Deficit, and Debt: General --- National Government Expenditures and Related Policies: General --- Labor Economics: General --- Budgeting & financial management --- Public finance & taxation --- Labour --- income economics --- Budget planning and preparation --- Budget execution and treasury management --- Performance-based budgeting --- Public financial management (PFM) --- Labor --- Budget --- Finance, Public --- Labor economics --- United States