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The Brookings Papers on Economic Activity (BPEA) is a semi-annual academic conference and journal that pairs rigorous research with real-time policy analysis to address the most urgent economic challenges of the day. Working drafts of the papers are presented at the conference typically held twice each year. The final papers and discussant remarks from each conference are subsequently published in the journal several months later.POPP, VONA, MARIN and CHEN on The Employment Impact of a Green Fiscal Push: Evidence from the American Recovery and Reinvestment ActBUCKMAN, CHOI, DALY and SEITELMAN on The Economic Gains from EquityCHERRY, JIANG, MATVOS, PISKORSKI and SERU on Government and Private Household Debt Relief during COVID-19RENNERT, PREST, PIZER, NEWELL, ANTHOFF, KINGDON, RENNELS, COOKE, RAFTERY, ŠEVČÍKOVÁ and ERRICKSON on The Social Cost of Carbon:Advances in Long-Term Probabilistic Projections of Population, GDP, Emissions, and Discount RatesREIS on Losing the Inflation AnchorAUTOR, DORN and HANSON on On the Persistence of the China Shock

'The papers in these volumes inevitably chart the course of Sir Alister's professional life and... I marvel at the prodigious output of his intellectual journey.'–Sir Shridath Ramphal, former Chancellor of the University of the West Indies, Common wealth Secretary General, Chairman of the West Indian Commission and Director-General of the Caribbean Regional Negotiating Machinery. “Sir Alister's deep interest such as human resource development, education, training and the capacity to deal with the challenges of change in the 21st century, are all deftly addressed in his many contributions to scholarship.” “What distinguished McIntyre from many of his colleagues was not only the technical brilliance of his writing on trade and economics, but his equally perceptive understanding of the role of human resources in the building of a sustainable livelihood in small devel oping states. These papers reflect the vision of one who was committed to creating an economic space to facilitate the movement of economic factors, goods, services skills and human resources.” –The Most Honourable Professor Sir Kenneth Hall, Former Principal and Pro Vice-Chancellor, University of the West Indies, Mona Campus.

Brookings Papers on Economic Activity (BPEA) provides academic and business economists, government officials, and members of the financial and business communities with timely research on current economic issues.

Brookings Papers on Economic Activity (BPEA) provides academic and business economists, government officials, and members of the financial and business communities with timely research on current economic issues.Contents:All Medicaid Expansions Are Not Created Equal: The Geography and Targeting of the Affordable Care ActCraig Garthwaite, John Graves, Tal Gross, Zeynal Karaca, Victoria Marone, and Matthew J. NotowidigdoPolicies and Payoffs to Addressing America's College Graduation DeficitChristopher Avery, Jessica Howell, Matea Pender, and Bruce SacerdoteThe Optimal Inflation Target and the Natural Rate of InterestPhilippe Andrade, Jordi Galí, Hervé Le Bihan, and Julien MatheronInflation Dynamics: Dead, Dormant, or Determined Abroad?Kristen J. ForbesMacri's Macro: The Elusive Road to Stability and GrowthFederico SturzeneggerProgressive Wealth TaxationEmmanuel Saez and Gabriel Zucman

Brookings Papers on Economic Activity (BPEA) provides academic and business economists, government officials, and members of the financial and business communities with timely research on current economic issues. Contents:The European Central Bank's Monetary Policy during Its First 20 Years, Philipp Hartmann and Frank SmetsAccounting for Macro-Finance Trends: Market Power, Intangibles, and Risk Premia, Emmanuel Farhi and François GourioThe Real Effects of Disrupted Credit: Evidence from the Global Financial Crisis, Ben S. BernankeThe Cyclical Sensitivity in Estimates of Potential Output, Olivier Coibion, Yuriy Gorodnichenko, and Mauricio UlateShould the Federal Reserve Regularly Evaluate Its Monetary Policy Framework?, Jeff Fuhrer, Giovanni P. Olivei, Eric S. Rosengren, and Geoffrey M.B. TootellMonetary Policy at the Effective Lower Bound: Less Potent? More International? More Sticky?, Kristin ForbesThe Efficacy of Large-Scale Asset Purchases When the Short-Term Interest Rate Is at Its Effective Lower Bound, James D. HamiltonThe Federal Reserve Is Not Very Constrained by the Lower Bound on Nominal Interest Rates, Eric T. SwansonComments on Monetary Policy at the Effective Lower Bound, Janet Yellen

Brookings Papers on Economic Activity (BPEA) provides academic and business economists, government officials, and members of the financial and business communities with timely research on current economic issues.Contents:On Secular Stagnation in the Industrialized World, Lukasz Rachel and Lawrence H. SummersA Forensic Examination of China's National Accounts, Wei Chen, Xilu Chen, Chang-Tai Hsieh, and Zheng SongA Unified Approach to Measuring u•, Richard K. Crump, Stefano Eusepi, Maric Giannoni, and Ays¸egül S¸ahinFiscal Space and the Aftermath of Financial Crises: How It Matters and Why, Christina D. Romer and David H. RomerOkun Revisited: Who Benefits Most from a Strong Economy? Stephanies R. Aaronson, Mary C. Daly, William L. Wascher, and David W. WilcoxOn the Economics of a Carbon Tax for the United States, Gilbert E. Metcalf

Brookings Papers on Economic Activity (BPEA) provides academic and business economists, government officials, and members of the financial and business communities with timely research on current economic issues.Contents:Is Automation Labor Share-Displacing? Productivity Growth, Employment, and the Labor ShareDavid Autor and Anna SalomonsSafety Net Investments in ChildrenHilary W. Hoynes and Diane Whitmore SchanzenbachJobs for the Heartland: Place-Based Polices in 21st-Century AmericaBenjamin Austin, Edward Glaeser, and Lawrence SummersMacroeconomic Effects of the 2017 Tax ReformRobert J. Barro and Jason FurmanLiquidity Crises in the Mortgage MarketYou Suk Kim, Steven M. Laufer, Karen Pence, Richard Stanton, and Nancy WallaceMortgage Market Design: Lessons from the Great RecessionTomasz Piskorski and Amit Seru

Brookings Papers on Economic Activity (BPEA) provides academic and business economists, government officials, and members of the financial and business communities with timely research on current economic issues.

Robert Lucas is one of the outstanding monetary theorists of the past hundred years. Along with Knut Wicksell, Irving Fisher, John Maynard Keynes, James Tobin, and Milton Friedman (his teacher), Lucas revolutionized our understanding of how money interacts with the real economy of production, consumption, and exchange.Lucas's contributions are both methodological and substantive. Methodologically, he developed dynamic, stochastic, general equilibrium models to analyze economic decision-makers operating through time in a complex, probabilistic environment. Substantively, he incorporated the quantity theory of money into these models and derived its implications for money growth, inflation, and interest rates in the long run. He also showed the different effects of anticipated and unanticipated changes in the stock of money on economic fluctuations, and helped to demonstrate that there was not a long-run trade-off between unemployment and inflation (the Phillips curve) that policy-makers could exploit.The twenty-one papers collected in this volume fall primarily into three categories: core monetary theory and public finance, asset pricing, and the real effects of monetary instability. Published between 1972 and 2007, they will inspire students and researchers who want to study the work of a master of economic modeling and to advance economics as a pure and applied science.

In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.

This paper introduces a new database of financial reforms covering 91 economies over 1973-2005. It describes the content of the database, the information sources utilized, and the coding rules used to create an index of financial reform. It also compares the database with other measures of financial liberalization, provides descriptive statistics, and discusses some possible applications. The database provides a multifaceted measure of reform, covering seven aspects of financial sector policy. Along each dimension the database provides a graded (rather than a binary) score, and allows for reversals.

Do highly indebted countries suffer from a debt overhang? Can debt relief foster their growth rates? To answer these important questions, this article looks at how the debt-growth relation varies with indebtedness levels, as well as with the quality of policies and institutions, in a panel of developing countries. The main findings are that, in countries with good policies and institutions, there is evidence of debt overhang when the net present value of debt rises above 20–25 percent of GDP; however, debt becomes irrelevant above 70–80 percent. In countries with bad policies and institutions, thresholds appear to be lower, but the evidence of debt overhang is weaker and we cannot rule out that debt is always irrelevant. Indeed, in such countries, as well as in countries with high indebtedness levels, investment does not depend on debt levels. The analysis suggests that not all countries are likely to profit from debt relief, and thus that a one-size-fits-all debt relief approach might not be the most appropriate one.

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This paper empirically evaluates four types of costs that may result from an international sovereign default: reputational costs, international trade exclusion costs, costs to the domestic economy through the financial system, and political costs to the authorities. It finds that the economic costs are generally significant but short-lived, and sometimes do not operate through conventional channels. The political consequences of a debt crisis, by contrast, seem to be particularly dire for incumbent governments and finance ministers, broadly in line with what happens in currency crises.

Why the global recession is in danger of becoming another Great Depression, and how we can stop it When the United States stopped backing dollars with gold in 1968, the nature of money changed. All previous constraints on money and credit creation were removed and a new economic paradigm took shape. Economic growth ceased to be driven by capital accumulation and investment as it had been since before the Industrial Revolution. Instead, credit creation and consumption began to drive the economic dynamic. In The New Depression: The Breakdown of the Paper Money Economy, Richard Duncan introduces an analytical framework, The Quantity Theory of Credit, that explains all aspects of the calamity now unfolding: its causes, the rationale for the government's policy response to the crisis, what is likely to happen next, and how those developments will affect asset prices and investment portfolios. In his previous book, The Dollar Crisis (2003), Duncan explained why a severe global economic crisis was inevitable given the flaws in the post-Bretton Woods international monetary system, and now he's back to explain what's next. The economic system that emerged following the abandonment of sound money requires credit growth to survive. Yet the private sector can bear no additional debt and the government's creditworthiness is deteriorating rapidly. Should total credit begin to contract significantly, this New Depression will become a New Great Depression, with disastrous economic and geopolitical consequences. That outcome is not inevitable, and this book describes what must be done to prevent it. Presents a fascinating look inside the financial crisis and how the New Depression is poised to become a New Great Depression Introduces a new theoretical construct, The Quantity Theory of Credit, that is the key to understanding not only the developments that led to the crisis, but also to understanding how events will play out in the years ahead Offers unique insights from the man who predicted the global economic breakdown Alarming but essential reading, The New Depression explains why the global economy is teetering on the brink of falling into a deep and protracted depression, and how we can restore stability.

“A brilliant and lucid new book” (John Lanchester, New York Times Magazine) about why paper money and digital currencies lie at the heart of many of the world's most difficult problems—and their solutionsIn The Curse of Cash, acclaimed economist and bestselling author Kenneth Rogoff explores the past, present, and future of currency, showing why, contrary to conventional economic wisdom, the regulation of paper bills—and now digital currencies—lies at the heart some of the world's most difficult problems, but also their potential solutions. When it comes to currency, history shows that the private sector often innovates but eventually the government regulates and appropriates. Using examples ranging from the history of standardized coinage to the development of paper money, Rogoff explains why the cryptocurrency boom will inevitably end with dominant digital currencies created and controlled by governments, regardless of what Bitcoin libertarians want. Advanced countries still urgently need to stem the global flood of large paper bills—the vast majority of which serve no legitimate purpose and only enable tax evasion and other crimes—but cryptocurrencies are like $100 bills on steroids.The Curse of Cash is filled with revealing insights about many of the most pressing issues facing monetary policymakers, from quantitative easing to alternative inflation targeting regimes. It also explains in detail why, if low interest rates persist, the best way to reinvigorate monetary policy is to implement fully effective and unconstrained negative interest rates.Provocative, engaging, and backed by compelling original arguments and evidence, The Curse of Cash has sparked widespread debate and its ideas have moved to the center of financial and policy discussions.

From the New York Times bestselling author of This Time Is Different,'a fascinating and important book'(Ben Bernanke) about phasing out most paper money to fight crime and tax evasion—and to battle financial crises by tapping the power of negative interest ratesThe world is drowning in cash—and it's making us poorer and less safe. In The Curse of Cash, Kenneth Rogoff, one of the world's leading economists, makes a persuasive and fascinating case for an idea that until recently would have seemed outlandish: getting rid of most paper money.Even as people in advanced economies are using less paper money, there is more cash in circulation—a record $1.4 trillion in U.S. dollars alone, or $4,200 for every American, mostly in $100 bills. And the United States is hardly exceptional. So what is all that cash being used for? The answer is simple: a large part is feeding tax evasion, corruption, terrorism, the drug trade, human trafficking, and the rest of a massive global underground economy.As Rogoff shows, paper money can also cripple monetary policy. In the aftermath of the recent financial crisis, central banks have been unable to stimulate growth and inflation by cutting interest rates significantly below zero for fear that it would drive investors to abandon treasury bills and stockpile cash. This constraint has paralyzed monetary policy in virtually every advanced economy, and is likely to be a recurring problem in the future.The Curse of Cash offers a plan for phasing out most paper money—while leaving small-denomination bills and coins in circulation indefinitely—and addresses the issues the transition will pose, ranging from fears about privacy and price stability to the need to provide subsidized debit cards for the poor.While phasing out the bulk of paper money will hardly solve the world's problems, it would be a significant step toward addressing a surprising number of very big ones. Provocative, engaging, and backed by compelling original arguments and evidence, The Curse of Cash is certain to spark widespread debate.

Research on Economic Inequality, Volume 22 begins with papers of widespread interest on the impact of the Great Recession. The first paper addresses the impact of'asset meltdown'on the wealth of the US middle class, with disparate racial and ethnic impacts. The second studies poverty and inequality in the US in the aftermath of the Great Recession. The next topic is on the evolution of poverty and inequality in the world. One paper proposes a new methodology to measure global poverty and inequality, while the second analyzes the importance of considering not only the desperately poor but also those just above the subsistence level. Great interest for inequality researchers lies on the use of wealth data. Two approaches to this issue are presented. Firstly, several papers study wealth inequality directly. Secondly, a paper uses annuitized wealth data to augment the income measure of economic well-being. An emerging field in the study of economic well-being is the use of self-reported status and perceptions data. Three papers employ this type of data, investigating happiness inequality, perception of income inequality, and the existence of a'Great Gatsby Curve'for job mobility.

Im Rahmen des Projekts Duncker & Humblot reprints heben wir Schätze aus dem Programm der ersten rund 150 Jahre unserer Verlagsgeschichte, von der Gründung 1798 bis zum Ende des Zweiten Weltkriegs 1945. Lange vergriffene Klassiker und Fundstücke aus den Bereichen Rechts- und Staatswissenschaften, Wirtschafts- und Sozialwissenschaften, Geschichte, Philosophie und Literaturwissenschaft werden nach langer Zeit wieder verfügbar gemacht – und zwar sowohl gedruckt als auch in elektronischer Form. Einige Titel sind bereits erschienen. Täglich kommen weitere hinzu. Bis Ende des Jahres wird das »Duncker & Humblot reprints«-Programm auf ca. 1.500 Bände anwachsen. Möchten Sie regelmäßig über Neuerscheinungen aus dem reprints-Programm informiert werden? Dann abonnieren Sie unseren E-Mail-Benachrichtigungsdienst.

Im Rahmen des Projekts Duncker & Humblot reprints heben wir Schätze aus dem Programm der ersten rund 150 Jahre unserer Verlagsgeschichte, von der Gründung 1798 bis zum Ende des Zweiten Weltkriegs 1945. Lange vergriffene Klassiker und Fundstücke aus den Bereichen Rechts- und Staatswissenschaften, Wirtschafts- und Sozialwissenschaften, Geschichte, Philosophie und Literaturwissenschaft werden nach langer Zeit wieder verfügbar gemacht – und zwar sowohl gedruckt als auch in elektronischer Form. Einige Titel sind bereits erschienen. Täglich kommen weitere hinzu. Bis Ende des Jahres wird das »Duncker & Humblot reprints«-Programm auf ca. 1.500 Bände anwachsen. Möchten Sie regelmäßig über Neuerscheinungen aus dem reprints-Programm informiert werden? Dann abonnieren Sie unseren E-Mail-Benachrichtigungsdienst.

This study finds that the currently dominant policy approaches in many African countries insufficient for achieving the structural transformation needed for better employment outcomes. It argues instead for an alternative economic policy framework based on a range of policies to stimulate an investment shift towards higher value-added production.

Gary R Saxonhouse was one of the leading world scholars on Japanese economy. Born in New York City in 1943, he attended Yale University, where he received his PhD in Economics in 1971. He joined the Faculty of Economics at the University of Michigan beginning in 1970, where he taught throughout his career. The selection of his published papers that comprises this two-volume publication is a testimony and tribute to his remarkable accomplishments and influence that were cut short by his untimely death in November 2006, following a battle with leukemia.Volume I contains a selection of his published papers that have been instrumental in enhancing the understanding of Japan's modern economic history, focusing in particular on the Japanese cotton-spinning industry.Volume II features a selection of his published papers that look at how Japan's technology and innovation were key in promoting Japan's economic success; how its economy was shaped by its comparative advantage and related policies; and how its macro-financial policies were implemented in the course of its economic growth after World War II.

This volume contains papers from the Society for the Study of Economic Inequality's third meeting held in Buenos Aries, Argentina, in July 2009. The first five papers focus on a number of Latin American countries, on the understudied topics of poverty and inequality in these areas. Specific issues covered by these papers include multidimensional poverty, equity effects of school drop-outs, and the role of transfer programs in reducing Latin American poverty. Additional papers provide research from further afield including China and France and cover topics such as: relative deprivation; taxation and inequality; mobility dominance; polarization; estimation of child costs; nutritional inequality; and, transportation inequalities. The volume includes work by such well-known authors as Jacques Silber, Jean-Yves Duclos, and Udo Ebert. This book is the 18th Volume in the notable Research on Economic Equality series which offers fresh theoretical and methodological insights into the key issues in the field of economic inequality, showcasing highly topical work from both senior researchers and emerging scholars.

The book is a collection of papers on micro and macro economic effects of financial innovation and contains updates and new inputs on this problem, ranging from the analysis of the international economic downturn that is still going on to the choices made with respect to the economic policies that preceded and followed it. Inappropriate risk management, poor control by the authorities in charge, as well as the uncurbed spending of some developed countries, which resulted into long-term deficits of the commercial balance, are seen as the main causes for a crisis that affected the financial and real sector globally, expanding from the Anglo-Saxon countries to the entire international economic system. There is general agreement about the assumption that serious reforms are needed to escape the crisis, regulating the behaviours of the “controlling” and “controlled” parties alike. The subject is obviously prone to further consideration, which the progression of such events will continue to stimulate and which will surely be the object of new scientific meetings during the next few months.

The chapters in this book are based on papers prepared for a conference organized by the Federal Reserve Bank of San Francisco, held at the bank September 23-25, 1987, to review and compare monetary policy experiences of Pacific Basin countries during the past 15 years. The theme of the conference was conceived with two purposes in mind. First, there was (and still is) a great need to enhance knowledge on the workings of economies in the Pacific Basin, which has been the fastest growing region in the world economy during the past 30 years. While much has been written on Pacific Basin trade and economic growth, relatively few studies have been published on the conduct of monetary policy in these economies. Second, as we in the United States and others elsewhere have learned, rapid financial market changes over the last 15 years have led to considerable adjustment in the conduct of monetary policy. A comparative study of various national experiences can yield insights into the inter­ actions between monetary policy and financial market changes more than is obtainable by examining indi vidual national experiences separately.

Every two years the members of GIRET (= Centre for International Re­ search on Economic Tendency Surveys) meet at conferences in order to promote the scientific discussion and to encourage the exchange of ideas. CIRET is an international study group for research in the field of business cycle surveys. CIRET was founded in 1960 and has at present about 350 full and corresponding members in 35 different coun­ tries. The members either carry out business, investment or consumer 1 surveys or are working on a practical or methodological level with the results of such surveys. The most important topics of the GIRET conferences are the predictive value of survey data as trade cycle indicators, the utilization of qualitative data in econometric models, forecasts of capital expenditures based on plans of private companies, the usefulness of consumer surveys for trade cycle analyses. In September 1977 the 13th CIRET Conference took place in Munich. On the occasion of the three-day conference 27 papers were presented.

First published in 1980, this book collects 17 lectures presented at the annual conference of the Association of University Teachers of Economics covering a wide range issues and debates. They include new theoretical points, criticisms of existing theory, the reporting of empirical studies and their implications, and refinements of methodological techniques. Among the topics covered are government deficits and capital accumulation; macroeconomic issues of management policy and foreign trade; empirical studies of foreign exchange markets, and supply and demand of hours of work; public sector and welfare economics; risk and uncertainty; and monopoly, competition and markets.

This volume is a collection of papers presented at the first meeting of the Society for the Study of Economic Inequality (ECINEQ). The Societys aims are to provide an international forum for all researchers interested in the study of economic inequality and related fields, bringing together the diversity of perspectives. The conference was held in Palma de Mallorca, Spain in July 2005. Over eighty parallel sessions were offered, providing novel and interesting work from both mature scholars and as well as new PhDs. With so much quality work from which to choose, it was necessary to limit the scope of Research on Economic Inequality, Volume 14.The first five papers all employ Spanish data and cover topics such as child poverty, social preferences toward redistribution, social exclusion, and multidimensional poverty. The next three papers examine inequality in the EU using alternative methodologies. Chapter Nine explores poverty dynamics among the elderly in Italy. Chapter Ten presents and extends the state of the art in multidimensional inequality measurement. Chapters Eleven and Twelve contribute to the theoretical underpinnings of inequality measurement. Chapters Thirteen through Fifteen contain analytical papers focused on evaluating the effects of public policy on poverty and inequality. The final two chapters use the questionnaire-experimental approach to examine individuals distributional preferences. This book is part of the'Research on Economic Inequality'series. It presents papers form the inaugural meeting of the Society for the Study of Economic Inequality (ECINEQ). It provides an international forum for all researchers interested in the study of economic inequality and related fields. It brings together a diversity of perspectives.

This study explores the prospect of the application of the basic principles of ICL into many other potential areas of social and economic policy. Using case studies it evaluates previously implemented ICL schemes where interest rate subsidies are usually the norm, and questions the merits of this approach.

This volume is both a tribute to and study of the French economist Jean-Paul Fitoussi. Fitoussi's pluralistic scholarship has shaped modern macroeconomics, political economy, economics of inequality and, more recently, the economics of sustainability.

In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.

In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.

Monetary Policy in a Converging Europe covers the most important monetary issues in the transition towards an Economic and Monetary Union in Europe, containing contributions from renowned experts in relevant research and policy areas. Among other things, the contributions discuss the scope for inflation targeting, monetary interdependencies within the `core'ERM countries, money demand within the European Union, the difference between the monetary transmission mechanisms in the various European countries, and the preferred exchange rate policy in Stage Two of EMU. The book provides an excellent overview of current issues for anyone interested in monetary policy in a converging Europe.

In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.

New Europe is a rhetorical term used by some analysts to describe European post-communist transition success stories. The term implies their recent return to European, or more precisely Western civilization, but suggests - given their (forced) communist detour - that there is no single Pan-European identity in the EU. This book examines the na

Financial inclusion is a multidimensional concept and countries have chosen diverse methods of enhancing financial inclusion with varying degrees of results. The heterogeneity of financial inclusion is particularly striking in the Asia-Pacific region as member countries range from those that are at the cutting edge of financial technology to others that are aiming to provide access to basic financial services. The wide disparity is not only inter-country but also intra-country. The focus of this paper is to take stock of the current state of financial inclusion in the Asia-Pacific region by highlighting twelve stylized facts about the state of financial inclusion in these countries. The paper finds that the state of financial inclusion depends on several factors, but a holistic approach calibrated to specific country conditions may lead to greater financial inclusion.

This paper presents a novel approach to investigate and model the network of euro area banks'large exposures within the global banking system. Drawing on a unique dataset, the paper documents the degree of interconnectedness and systemic risk of the euro area banking system based on bilateral linkages. We develop a Contagion Mapping model fully calibrated with bank-level data to study the contagion potential of an exogenous shock via credit and funding risks. We find that tipping points shifting the euro area banking system from a less vulnerable state to a highly vulnerable state are a non-linear function of the combination of network structures and bank-specific characteristics.

This paper measures the performance of different metrics in assessing banking system vulnerabilities. It finds that metrics based on equity market valuations of bank capital are better than regulatory capital ratios, and other metrics, in spotting banks that failed (bad apples). This paper proposes that these market-based ratios could be used as a surveillance tool to assess vulnerabilities in the banking sector. While the measures may provide a somewhat fuzzy signal, it is better to have a strategy for identifying bad apples, even if sometimes the apples turn out to be fine, than not being able to spot any bad apples before the barrel has been spoiled.

This paper argues that oil revenue management and public investment in Congo are vulnerable to corruption as a result of limited transparency and accountability. Corruption has potentially contributed to poor macro-fiscal outcomes. The paper acknowledges the authorities'anti-corruption efforts made so far and proposes further critical reforms to reduce remaining vulnerabilities. Using a dynamic stochastic general equilibrium model results show that, depending on the reforms adopted, the potential additional growth can range between 0.8 to 1.8 percent per year over the next 10 years, and debt can decline by 2.25 to 3 percent of GDP per year over the same period. These results suggest that macrofiscal gains from anti-corruption reforms could be substantial even under conservative reform scenarios.

This paper examines the drivers, and reestimates the size of shadow economies in Europe, with a focus on the emerging economies, and recommends policies to increase formality. The size of shadow economies declined across Europe in recent years but remains significant, especially in Eastern Europe. In the emerging European economies, the key determinants of shadow economy size are regulatory quality, government effectiveness, and human capital. The paper argues that a comprehensive package of reforms, focused on country-specific drivers, is needed to successfully combat the shadow economy. The menu of policies most relevant for Europe's emerging economies include: reducing regulatory and administrative burdens, promoting transparency and improving government effectiveness, as well as improving tax compliance, automating procedures, and promoting electronic payments.

In Latin America and the Caribbean (LAC), financial technology has been growing rapidly and is on the agenda of many policy makers. Fintech provides opportunities to deepen financial development, competition, innovation, and inclusion in the region but also creates new and only partially understood risks to consumers and the financial system. This paper documents the evolution of fintech in LAC. In particular, the paper focuses on financial development, fintech landscape for domestic and cross border payments and alternative financing, cybersecurity, financial integrity and stability risks, regulatory responses, and considerations for central bank digital currencies.

This paper discusses the evolution of the household debt in Australia and finds that while higher-income and higher-wealth households tend to have higher debt, lower-income households may become more vulnerable to rising debt service over time. Then, the paper analyzes the impact of a monetary policy shock on households'current consumption and durable expenditures depending on the level of household debt. The results corroborate other work that households'response to monetary policy shocks depends on their debt and income levels. In particular, households with higher debt tend to reduce their current consumption and durable expenditures more than other households in response to a contractionary monetary policy shocks. However, households with low debt may not respond to monetary policy shocks, as they hold more interest-earning assets.

This paper discusses the benefits and challenges of implementing a rule-based fiscal responsibility framework, using the Philippines as a case study. It estimates structural measures of the fiscal stance over the period 1980–2016 and applies a stochastic simulation model to determine the optimal set of fiscal rules. The empirical analysis indicates that discretionary fiscal policy has been procyclical, and the degree of procyclicality has increased in recent years. While the national government's non-binding ceiling on the overall budget deficit is helpful, it does not constitute an appropriate operational target to guide fiscal policy over the economic cycle and necessarily ensure that the fiscal stance meets the government's intertemporal budget constraint. To this end, using stochastic simulations, this paper makes the case for a well-designed fiscal responsibility law that enshrines explicit fiscal rules designed for countercyclical policy and long-term debt sustainability, and an independent fiscal council to improve accountability and transparency.

This paper uses a multi-region, forward-looking, DSGE model to estimate the macroeconomic impact of a tax reform that replaces a corporate income tax (CIT) with a destination-based cash-flow tax (DBCFT). Two key channels are at play. The first channel is the shift from an income tax to a cash-flow tax. This channel induces the corporate sector to invest more, boosting long-run potential output, GDP and consumption, but crowding out consumption in the short run as households save to build up the capital stock. The second channel is the shift from a taxable base that comprises domestic and foreign revenues, to one where only domestic revenues enter. This leads to an appreciation of the currency to offset the competitiveness boost afforded by the tax and maintain domestic investment-saving equilibrium. The paper demonstrates that spillover effects from the tax reform are positive in the long run as other countries'exports benefit from additional investment in the country undertaking the reform and other countries'domestic demand benefits from improved terms of trade. The paper also shows that there are substantial benefits when all countries undertake the reform. Finally, the paper demonstrates that in the presence of financial frictions, corporate debt declines under the tax reform as firms are no longer able to deduct interest expenses from their profits. In this case, the tax shifting results in an increase in the corporate risk premia, a near-term decline in output, and a smaller long-run increase in GDP.

Public sector balance sheets (PSBS) provide a framework for comprehensive and deep analysis of fiscal risks and policies. To illustrate these benefits, this paper shows how PSBS analysis can be applied to assess risks to Indonesia's public sector stemming from its public corporations. The paper also shows that the government's plans to finance a ramp-up in public investment with additional tax revenue increases both economic growth and public wealth.

The use of e-commerce around the world has accelerated in recent years, with Asia, led by China, spearheading the rise. Using cross-country enterprise survey data, this paper shows that firms engaged in e-commerce have higher productivity and generate a larger share of their revenues from exports than other firms. This is particularly true in Asia, where firms have 30 percent higher productivity and generate about 50 percent more of their revenues from exports. The results presented in this paper are robust to the use of instrumental variables, which highlight possible larger effects of e-commerce on Asian productivity and exports when essential elements are in place for its effective use, such as reliable electricity, telecommunication, and transport infrastructure. Despite the rapid growth of e-commerce in recent years, gaps persist in digital infrastructure and legislation, preventing many Asian countries from fully reaping the potential benefits of e-commerce.

Growing regional inequality within countries has raised the perception that “some places and people” are left behind. This has prompted a shift toward inward-looking policies and away from pro-growth reforms. This paper presents novel stylized facts on regional inequality for OECD countries. It shows that regional disparity in per-capita GDP is large (even after adjusting for regional price differences), persistent, and widening over time. The paper also finds that rising nationwide income inequality is associated with both rising within-region income inequality and widening average income across regions. The rise in inequality is related to declining incentives for interregional labor mobility, especially for poor households in lagging regions, which are estimated to reduce by as much as one-third in the United States. Against these facts, the paper proposes a framework to identify whether, how and by whom fiscal policies can be used to tackle regional inequality. It outlines conditions under which those policies should be spatially-targeted and illustrates how they can be complementary to conventional means-testing methods in mitigating income inequality.

Can a government reduce income inequality by changing the composition of public spending while keeping the total level of expenditure fixed? Using newly assembled data on spending composition for 83 countries across all income groups, this paper shows that reallocating spending toward social protection and infrastructure is associated with reduced income inequality, particularly when it is financed through cuts in defense spending. However, the political and security situation matters. The analysis does not find evidence that lowering defense spending to finance infrastructure and social outlays improves income distribution in countries with weak institutions and at higher risk of conflict. Reallocating social protection and infrastructure spending towards other types of spending tends to increase income inequality. Accounting for the long-term impact of health spending, and particularly education spending, helps to better capture the equalizing effects of these expenditures. The paper includes a discussion of the implications of the findings for Indonesia, a major emerging market where income inequality is at the center of policy issues.