Back Matter

Author(s):
Marco Pinon, Alejandro Lopez Mejia, M. (Mario) Garza, and Fernando Delgado
Published Date:
July 2012
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    Contributors

    Geoffrey Bannister is a senior economist in the Caribbean I Division of the IMF’s Western Hemisphere Department.

    Luis-Diego Barrot is a research assistant in the Central American Division of the IMF’s Western Hemisphere Department.

    Alejandro Carrión-Menéndez is a research assistant in the Regional Studies Division of the IMF’s Western Hemisphere Department.

    Fernando L. Delgado is the regional resident representative for Central America, Panama, and the Dominican Republic in the IMF’s Western Hemisphere Department.

    Florencia Frantischek was a senior economist in the Central American Division of the IMF’s Western Hemisphere Department.

    Mario Garza is deputy division chief in the Central American Division of the IMF’s Western Hemisphere Department.

    Alejandro López-Mejía is deputy division chief in the Central American Division of the IMF’s Western Hemisphere Department.

    Stephanie Medina Cas is a senior economist in the Central American Division of the IMF’s Western Hemisphere Department.

    Mynor Meza is a local economist attached to the Regional Representative Office for Central America, Panama, and the Dominican Republic of the IMF’s Western Hemisphere Department.

    Pablo Morra is an economist in the Central American Division of the IMF’s Western Hemisphere Department.

    Marco Piñon is division chief of the Central American Division of the IMF’s Western Hemisphere Department.

    Dominique Simard is a senior economist in the Caribbean I Division of the IMF’s Western Hemisphere Department.

    Andrew Swiston is an economist in the Central American Division of the IMF’s Western Hemisphere Department.

    Index

    [Page numbers followed by f, n or t refer to figures, notes or tables, respectively.]

    A

    Advanced economies

    • financial sector regulation and supervision, 227–29

    • global transmission of shocks from, 15–16, 18–23, 20f, 21, 25, 26f

    • historical growth, international comparison of, 65–66, 66f

    • outcomes of global financial crisis, 34

    • See also specific country

    B

    Balance of payments, outcomes of global financial crisis, vii, 34–36, 37f, 57 Banking sector

    • competition in, interest rate transmission and, 200, 203, 207, 212, 213

    • current status, 147

    • global integration prior to crisis, 9

    • lending policy response to crisis, 49, 52f

    • reserve coverage in crisis, 46–47, 48f

    • See also Interest rate transmission; Liquidity management; Regulation and supervision, financial sector

    Basel Core Principles, viii, 64, 223–24, 225, 227, 228f, 229–33, 231f

    • Before global financial crisis

      • credit boom in CAPDR, 42–43

      • debt ratios, 40

      • deficit reductions, vii, 40, 43

      • financial regulation and supervision, 47, 225

      • financial soundness indicators, 41f

      • fiscal policies and performance, ix, 2, 40

      • global financial integration, ix, 2, 5–8, 9–10

      • inflation patterns, 137

      • protective factors in CAPDR, vii, ix, 2

    C

    Capital flows

    • outcomes of global financial crisis, 35–36, 57

    Capital markets

    • current quality, 212

    • determinants of interest rate transmission, 200–201

    • strategies for strengthening monetary policy, 147–48

    Central American Council of Financial

    • Supervisors, 232, 243

    Central banks

    • accountability and transparency, 144, 148, 150, 151 determinants of interest rate transmission, 201

    • independence, 142, 145–46, 149, 151, 201, 214

    • inflation forecasting capacity, 148, 151, 214

    • inflation-targeting regime implementation, 138, 139

    • in LA6 countries, 142–43

    • lending to government, 142, 145, 150

    • policy objectives, 141, 145, 149

    • profits and losses, 143t, 146 reputation and credibility, 144

    • response to financial crisis in advanced economies, 34

    • response to financial crisis in CAPDR, 49

    Commodity prices

    • monetary policy objectives, 138, 145

    • outcomes of global financial crisis, 35, 37–38 transmission channels for spillover effects, 28, 29f

    Competition

    • in banking sector, interest rate transmission and, 200, 203, 213

    • goals of reform agenda for CAPDR, 62

    Costa Rica

    • banking sector, 147

    • central bank independence, 146, 149

    • central bank performance, 146, 149

    • concerns during crisis, 54

    • debt ratio modeling, 98, 98f, 100, 102–3, 107, 115

    • dollarization, 9

    • effects of intra-CAPDR shocks, 21

    • financial sector regulation and supervision, 228–29, 232, 233, 242

    • fiscal policy recommendations, 129

    • IMF assistance to, 54, 57

    • inflation forecasting capacity, 148 interest rate transmission, 147, 206–7, 212

    • macroprudential policies, 241

    • monetary policy, 145–49, 188

    • physical capital investment to raise growth, 77

    • policy response to crisis, 41

    • private sector lending in crisis, 54t public spending, 117, 120

    • recovery from crisis, 57

    • remittance flows, 10

    • structural growth factors, 79–81

    • tax policy, 123–4, 127–8

    • trade patterns and trends, 6, 13

    • transmission of global spillovers and shocks to, 19–21, 27

    • U.S. business cycle comovement, 13

    Countercyclical policies, vii

    • debt sustainability studies, 89

    • macroprudential, 233–34, 242

    • microprudential, 236

    • to mitigate external shocks, 2

    • response to financial crisis in CAPDR, 40, 46–47

    Credit market, 9

    • in CAPDR prior to crisis, 42–43, 42f, 43f

    • determinants of interest rate transmission, 201

    • effects of global financial crisis, 34, 39, 49, 52f, 57

    • macroprudential regulation, 241–42 ratings, 63, 91, 101, 102t, 103, 114, 115, 116

    Currency risk premium, 178–85, 196

    • Customs administration, 127

    D

    Debt ratios

    • countercyclical policies and, 89

    • credit rating objectives, 63

    • empirical studies of thresholds, 88–89, 88t

    • goals for CAPDR, 103

    • growth and, 89

    • intolerance equation, 94–95

    • original approach to intolerance modeling, 89–92

    • outcomes of alternate policy scenarios, 107, 110–11t

    • outcomes of financial crisis, 46, 87, 106

    • prior to global financial crisis, 40

    • required size of fiscal consolidation to stabilize, 114–16, 115f

    • revised approach to intolerance modeling, 92–97, 103

    • stochastic sustainability analysis, 107, 112–13f, 113

    • theoretical limits, 87–88, 90

    • tolerance for indebtedness, 63

    • tolerance modeling of CAPDR, 97–104

    Deficit reduction, prior to global financial crisis, 40, 43 Dollarization

    • de-dollarization to reduce pass-through effects, 64 inflation-targeting regime implementation and, 139 interest rate linkage, 178, 193–96, 200

    • interest rate outcomes, 190–93

    • interest rate transmission and, 203, 208, 213

    • transmission of external shocks through, 9, 21–22

    • See also Dollarization in El Salvador

    Dollarization in El Salvador, 9, 63–64

    • currency risk premium in period before, 179–81 effects of U.S. monetary policy and business cycle, 13, 185–89, 196

    • impact on currency risk premium, 178, 182–85, 196 monetary policy transmission and, 190–96

    • seigniorage revenue outcomes, 184–85, 184f

    • transition period, 177

    Dominican Republic

    • banking sector, 147

    • central bank independence, 146

    • central bank performance, 146

    • debt ratio modeling, 100, 101, 103, 107, 115

    • economic growth patterns, 66

    • effects of global financial crisis, 36–37

    • effects of intra-CAPDR shocks, 21

    • financial sector regulation and supervision, 225–27, 232, 242

    • fiscal policy recommendations, 128, 129

    • IMF assistance to, 55, 58

    • inflation forecasting capacity, 148

    • interest rate transmission, 147, 206–7, 212

    • monetary policy, 145–49, 188

    • physical capital investment to raise growth, 77

    • policy response to crisis, 41

    • public spending, 117, 120

    • structural growth factors, 79–81

    • tax policy, 123, 124, 128

    • trade patterns and trends, 6, 13

    • transmission of global spillovers and shocks to, 19 U.S. business cycle comovement, 13

    E

    Earmarks, 120

    Educational attainment, 72, 77, 79f, 80f, 82

    El Salvador

    • debt ratio modeling, 99, 101, 102, 107, 116

    • effects of intra-CAPDR shocks, 21

    • elections during crisis, 54, 55

    • financial sector regulation and supervision, 225, 229, 232, 232n, 242

    • fiscal policy recommendations, 129

    • global integration of financial sector, 9

    • human capital investment to raise growth, 77

    • IMF assistance to, 54, 55–57

    • macroprudential policies, 241

    • physical capital investment to raise growth, 77

    • public debt, 46

    • public spending, 117, 120

    • recovery from crisis, 57

    • structural growth factors, 79, 81

    • tax policy, 123, 127, 128

    • trade patterns and trends, 6, 13

    • transmission of global spillovers and shocks to, 19–21, 27

    • See also Dollarization in El Salvador

    Equity markets, 223–24n European Union, 97

    Exchange rate policy

    • in CAPDR, 203, 203t

    • as determinant of interest rate transmission, 200, 203, 207, 208–12

    • future challenges and opportunities, ix

    • inflation targeting and, 139

    • in LA6 countries, 141, 143, 203, 203t

    • monetary policy priorities, 145, 150, 213–14

    • outcomes of financial crisis, 46, 47f pass-through effects, 64

    • prior to global financial crisis, vii protection from foreign exchange risk, 237–38, 241

    • See also Dollarization

    F

    Financial sector

    • determinants of interest rate transmission, 200–202

    • global integration prior to crisis, 9–10 macroprudential policies, 233–42, 243 mechanisms for transmission of external shocks, 8–9

    • microprudential measures, 234n, 236 outcomes of global financial crisis, 39

    • reforms to raise growth, 81, 83, 84

    • responses to financial crisis, 47–49, 50–51t, 53t, 58

    • See also Banking sector

    Fiscal policy

    • debt dynamic outcomes of policy scenarios, 107, 110–11t

    • expenditure policies for stabilization and recovery, 116–21

    • future challenges and opportunities, vii, ix–x

    • goals of reform agenda for CAPDR, 62, 63

    • primary balance outcomes of policy scenarios, 108, 108–9t

    • prior to global financial crisis, vii, 2, 40 required size of fiscal consolidation, 114–16

    • response to financial crisis in CAPDR, 40–46, 105–7, 106f

    • revenue policies for stabilization and recovery, 122–27

    • scope of reform effort, 63

    • setting priorities for reform, 128–9, 129f

    Flexibility of economy

    • as growth factor, 76, 81

    • monetary policy, 139–40

    • product markets, 71, 81

    • public spending, 120, 130

    • recommendations for CAPDR, 62

    Flexible Credit Line, 49

    Foreign direct investment, 9, 35–36, 36f, 36t

    G

    Global financial crisis

    • International Monetary Fund support to CAPDR, 49–55, 53t, 58

    • policy responses in CAPDR, 39–49

    • response of advanced economies, 34

    • See also Before global financial crisis; Outcomes of global financial crisis

    Global integration of CAPDR economies business cycle synchronization, 8, 13–15, 14t

    • cross-border asset holding, 9–10, 11f

    • elasticity of growth to external shocks, 22–23, 23t

    • evolution prior to crisis, 5–13, 30, 33

    • growth outcomes, 2

    • outcomes of shocks from advanced economies, 15–16, 18–23

    • policies to mitigate external shocks, 2

    • prior to crisis, ix, 2, 5–8, 9–10 structural vector autoregression modeling, 16–18, 23–27, 24f

    • transmission channels for external spillovers, 27–30 transmission of external fluctuations, 2, 5, 8–9, 33

    • transmission of intraregional shocks, 21, 22f, 30

    • vulnerability to crisis from, ix, 2, 30

    Gross domestic product

    • external liabilities as percentage of, 9, 11f

    • global growth correlations, 15

    • global outcomes of shocks from advanced economies, 15–16, 18–23, 20f, 30

    • growth correlations within CAPDR, 15, 16t

    • optimal debt ratio, 88

    • outcomes of global financial crisis, vii, 56f

    • physical capital investment ratio, 77, 78f, 83

    • projected growth, 68

    • remittances in, 10

    • structural vector autoregression modeling of crisis outcomes, 25

    • trade patterns and trends, 6, 7f volatility patterns in CAPDR, 15, 16t

    Growth

    • debt levels and, 90

    • econometric modeling of determinants of, 62, 69–72

    • expected outcomes of structural reforms, 62, 73–74, 74t, 75t, 79–83, 80f, 83f

    • factor accumulation for, 72

    • forecasts, 67, 68f

    • future challenges and opportunities, vii–viii, ix, 58, 65

    • global business cycle correlations, 13, 14t, 15

    • global integration of CAPDR economies and, 2 growth correlations within CAPDR, 15, 16t

    • historical performance of CAPDR, 65–68, 66f, 67f

    • human capital investment to raise, 70–71, 72, 79, 79f, 80f, 81, 82 outcomes of global financial crisis, 30, 36–38, 56f

    • physical capital investment to raise, 70–71, 72, 77, 78f, 81, 82

    • reform agenda for CAPDR, 62

    • strategies for improving, 72–74, 76–83

    • structural reforms modeling, 71–72, 73–74

    • structural vector autoregression modeling of crisis outcomes, 23–27, 24f

    • transmission channels for external spillovers, 27–30

    • volatility patterns in CAPDR, 15, 16t

    Guatemala

    • banking sector, 147

    • central bank independence, 146

    • central bank performance, 146

    • concerns during crisis, 54

    • debt ratio modeling, 100, 101, 103, 115

    • dollarization, 9

    • effects of global financial crisis, 25, 36–37

    • effects of intra-CAPDR shocks, 21

    • financial sector regulation and supervision, 225–27, 229, 242

    • fiscal policy recommendations, 128

    • human capital investment to raise growth, 77

    • IMF assistance to, 54, 57

    • inflation forecasting capacity, 148

    • interest rate transmission, 147, 206–7, 212

    • macroprudential policies, 241

    • monetary policy, 145–49, 188, 202

    • physical capital investment to raise growth, 77

    • public spending, 117, 120

    • recovery from crisis, 57

    • structural growth factors, 79, 81

    • tax policy, 123, 127, 128

    • trade patterns and trends, 6, 13

    • transmission of global spillovers and shocks to, 19, 27 U.S. business cycle comovement, 13

    H

    Honduras

    • central bank independence, 146, 149

    • central bank performance, 146, 149

    • debt ratio modeling, 100–1, 115

    • financial sector regulation and supervision, 225

    • fiscal policy recommendations, 128, 129

    • IMF assistance to, 55, 58

    • inflation forecasting capacity, 148

    • interest rate transmission, 206–7, 212 macroprudential policies, 241

    • monetary policy, 145–48

    • physical capital investment to raise growth, 77

    • public spending, 119, 120

    • structural growth factors, 81

    • tax policy, 123–4, 127

    • trade patterns and trends, 6

    • transmission of global spillovers and shocks to, 19–21, 27

    Human capital

    • econometric modeling of economic growth determinants, 70–71

    • goals of reform agenda for CAPDR, 62

    • as source of economic growth, 72, 79, 79f, 83, 84

    I

    Inflation

    • credit ratings and, 90–91

    • dollarization outcomes in El Salvador, 185, 188–89, 189f

    • expectations, 139

    • forecasting, 144, 148, 151, 214

    • future challenges and opportunities, 58

    • patterns and trends, 137, 138f, 140f

    • Taylor-rule analysis, 185–86

    • See also Inflation targeting

    Inflation targeting

    • benefits, 139

    • in CAPDR, 199n, 202, 212 communication with markets in, 139–40

    • exchange rate smoothing and, 139

    • flexibility in, 139–40

    • key elements of policy regime for, 138–40

    • in LA6 countries, 141

    • preconditions, 139

    • priorities, 145

    • shortcomings in CAPDR, 137

    Institutional Investor Rating, 90–104

    Interest rates

    • business cycle correlation between U.S. and dollarized economies, 64

    • currency risk premium, 178–85, 196 dollarization outcomes in El Salvador, 63–64, 178, 182–85, 190–93, 191f, 192f, 194–96, 194t, 195f

    • inflation and, 137

    • interbank markets, 28, 143, 147, 148, 151 pass-through effects, 64

    • policy effectiveness in LA6 countries, 143

    • response to financial crisis in advanced economies, 34 response to financial crisis in CAPDR, 47, 48f

    • transmission of external shocks, 9–10

    • See also Interest rate transmission

    Interest rate transmission

    • banking sector concentration and, 200, 203, 213

    • in CAPDR and LA6, 64, 202–7, 204t, 205f, 206f, 212, 213, 213t central bank independence and, 201

    • determinants of, 200–202

    • dollarization and, 203, 208, 213

    • effectiveness of, 199

    • exchange rate policy and, 200, 203, 207, 208–12

    • financial system development and, 200–201

    • fiscal dominance and, 201, 203

    • mechanisms of, 144, 147

    • panel data analysis, 207–12, 209–10t, 211f

    • rationale for strengthening, 199

    • regulatory and institutional factors in, 201–202, 203

    • strategies for improving, 64, 212

    International Monetary Fund

    • in CAPDR region before crisis, ix database of structural reforms, 62

    • debt sustainability studies, 88–90

    • effectiveness of CAPDR programs, 55–57, 58 response to financial crisis, 2

    • support to CAPDR in crisis, 49–55, 53t, 58

    • technical assistance in revenue administration, 126–27

    L

    LA3 countries, 77, 79, 81

    LA5 countries, 42

    • financial sector regulation and supervision, 227–29 macroprudential instruments, 238–40

    LA6 countries, 77, 84

    • central bank accountability and transparency, 144 central bank independence, 142–3

    • central bank profits and losses, 143t

    • inflation patterns, 137, 138f, 140f

    • interest rate transmission in, 202–6, 204t, 205f, 206f

    • monetary policy, 140–44

    • relevance of findings from, 140–41, 202 restrictions on central bank lending to public sector, 142

    Liquidity management

    • macroprudential instruments, 241

    • recommendations for, 150–51

    • reserve requirement, 234n, 237

    • response to financial crisis, 34, 49, 53t

    • shortcomings in crisis response, 2–3

    M

    Macroeconomic performance

    • dollarization effects, 22

    • as economic growth factor, 72–73 forecasting, 144, 177–78

    • goals of reform agenda for CAPDR, 62

    • monetary policy to maintain, 138

    • prior to global financial crisis, ix, 2, 33

    • response to financial crisis, 34, 39–40, 55, 57, 58

    Macroprudential policies, 223, 233–42, 235t, 237t, 238f, 239f, 240f, 243

    Manufacturing sector

    • global business cycle synchronization, 13–15

    Maturity mismatches, 234, 236, 241, 243

    Monetary policy

    • assessing quality of, 137–38, 148–50

    • central bank lending to public sector, 142

    • characteristics of well-functioning systems, 138–40, 141

    • current quality, 63, 144–49, 149f, 149t, 150

    • economic significance, 177

    • effectiveness of policy instruments, 143, 147, 149, 150–51, 199

    • effect of anchor country’s, on pegged country, 185–86, 196

    • fiscal dominance, 142, 145–46, 151, 201, 214

    • flexibility to respond to shocks, 139–40

    • goals of reform agenda for CAPDR, 62

    • IMF strategy for CAPDR, 55

    • indications for reform, 137

    • in LA6 countries, 140–44

    • objectives, 138, 141, 145, 149, 150

    • obstacles to effectiveness, 138

    • pass-through effects, 64, 190–96, 196

    • prior to global financial crisis, ix recommendations for improving, 150–51, 211–12

    • response to financial crisis, 46–47, 58 shortcomings in crisis response, 2–3 See also Inflation targeting

    N

    Nicaragua

    • banking sector, 147

    • central bank independence, 146, 149

    • central bank performance, 146, 149

    • debt ratio modeling, 100, 115

    • dollarization, 9

    • economic growth patterns, 66

    • effects of global financial crisis, 25

    • effects of intra-CAPDR shocks, 21

    • fiscal policy recommendations, 128, 129

    • global integration of financial sector, 9

    • IMF assistance to, 55, 58

    • inflation forecasting capacity, 148

    • macroprudential policies, 241

    • monetary policy, 145–48

    • physical capital investment to raise growth, 77

    • policy response to crisis, 41

    • public debt, 46

    • public spending, 117, 119

    • remittance flows, 10

    • structural growth factors, 81

    • tax policy, 122, 124, 128

    • trade patterns and trends, 6

    • transmission of global spillovers and shocks to, 19–21, 27

    North American Free Trade Agreement, 8

    O

    Outcomes of global financial crisis

    • breadth and depth, 34, 35f

    • for CAPDR countries, vii, 33–39, 34–39, 37f, 38f, 44f, 57

    • concerns in CAPDR countries, 54

    • debt ratios, 46, 88

    • effects of IMF programs, 55–57

    • financial soundness indicators, 41f fiscal deficits, 145–46

    • global recovery patterns, 56f

    • in LA6 countries, 142

    • projected growth, 68

    • stabilization and recovery, 34, 57

    • structural vector autoregression modeling, 23–27, 24f

    P

    Panama

    • debt ratio modeling, 100, 102–3, 107, 115

    • dollarization, 9, 188, 190–93

    • economic growth patterns, 66

    • effects of global financial crisis, 36–37

    • financial sector regulation and supervision, 225, 227–28, 231–32, 232n, 242

    • fiscal policy recommendations, 128, 129

    • human capital investment to raise growth, 77

    • physical capital investment to raise growth, 77

    • policy response to crisis, 41

    • public debt, 46

    • public spending, 117

    • structural growth factors, 81

    • tax policy, 122, 123, 127

    • trade patterns and trends, 6

    • transmission of global spillovers and shocks to, 19–21, 27

    Pass-through effects

    • monetary policy transmission to dollarized economy, 190–97

    • reduction of, in inflation targeting, 139

    • strategies to improve effectiveness of monetary policy, 199

    • See also Interest rate transmission

    Pension systems, 144

    Per capita income

    • comparison within CAPDR region, 66, 67f

    • in debt intolerance equation, 94–95

    • historical patterns, 65–66, 66f, 67f, 68f

    • recent trends in CAPDR, vii, viii

    Physical capital investment as growth factor, 70–71, 72, 77, 78f, 83, 84

    Poverty Reduction and Growth Facility, 55

    Private investment

    • goals of reform agenda for CAPDR, 62

    • public-private partnerships, 121

    • as source of economic growth, 72, 77

    Productivity

    • future challenges and opportunities, vii–viii

    • goals of reform agenda for CAPDR, 62

    • as growth factor, 84

    Product markets

    • global integration, 6, 8

    • reforms, 74, 81–83, 82f

    R

    Regulation and supervision, financial sector

    • assessment, 223–24

    • cross-border coordination, 225, 232, 242–43

    • current quality, 64, 147, 224–29, 242

    • determinants of interest rate transmission, 201–202, 203

    • future challenges and opportunities, viii, ix, 64, 223, 242–43

    • as growth factor, 74, 76

    • IMF strategy for CAPDR, 55

    • international comparison, 227–29

    • macroprudential, 233–42, 243

    • policy responses to financial crisis, 50–51t

    • prior to financial crisis, 47, 225

    • recommendations for strengthening monetary policy, 151

    • risk-based supervision, 225, 228–29, 232, 242

    • self-assessments by CAPDR banks, 229–33, 230t, 231f

    • technical assistance, 243

    Remittances

    • country of origin, 10

    • intraregional, 10

    • outcomes of global financial crisis, 35

    • patterns and trends prior to crisis, 10–13, 12f, 12t

    • source country determinants of, 12–13

    • transmission of spillover effects, 2, 28, 29f, 30

    Risk assessment and management

    • future of financial sector regulation, viii

    • macroprudential instruments, 233–42, 243

    • risk-based supervision in financial sector, 225, 228–29, 232, 242

    S

    Seigniorage revenue, 184–85, 184f Services trade, 6–8

    Special drawing rights, 49, 52, 54t, 58 Spending

    • composition of, following crisis, 116–19 earmarks, 120

    • international comparison, 117f medium-term expenditure frameworks, 120

    • public-private partnerships, 121

    • recommended reforms for stabilization and recovery, 120–22, 130

    • reform agenda, 63

    • response to global financial crisis, 40, 116–19

    • untargeted subsidies, 120

    • wage bill, 117, 120

    Stand-by arrangements, 49–52, 58

    Stimulus packages

    • fiscal policy response to financial crisis in CAPDR, 105–7, 106f

    • response to global financial crisis, 34, 41, 44f, 130

    • temporary versus permanent investments, 118–19

    Structural reforms

    • econometric panel growth regression modeling, 62, 70–72

    • expected growth outcomes, 62, 73–74, 74t, 75t, 76, 79–84, 80f, 83f

    • future challenges and opportunities, viii, ix, 58

    • goals of reform agenda for CAPDR, 62

    • historical efficiency outcomes, 72, 73f

    • openness to external transactions, 81, 84

    • product market, 81–83, 82f rationale for broad-scale approach, 73, 76, 84

    Structural vector autoregression modeling

    • of crisis outcomes in CAPDR, 23–27, 24f

    • methodology, 16–18, 27

    System generalized method of moments modeling, 65, 69–70, 92

    T

    Tax revenues

    • administrative efficiency, 126–27

    • current effort, 122–23, 122f, 123f

    • expenditures and exemptions, 124–26, 126f, 127

    • income tax, 123–24, 125, 125f

    • international comparison of rates, 127

    • outcomes of global financial crisis, 38–39, 40, 45f, 107

    • to stabilize debt ratios, 116

    • strategies for closing revenue gap, 123– 27, 129–30

    Taylor-rule analysis, 185–86

    Tourism, 7–8n

    Trade

    • business cycle synchronization, 8, 8f customs administration, 128

    • global integration prior to crisis, 5–8

    • major trading partners, 5–6, 6f

    • outcomes of global financial crisis, 34–35 in services, 6–8

    • transmission of business cycle effects, 13–15

    • transmission of spillover effects, 28, 29f

    Transparency

    • central bank, 144, 148, 149–50, 151

    • in inflation-targeting regime, 137

    U

    United States

    • business cycle effects on dollarized economies, 64 CAPDR trade, 5–6, 8, 8f

    • debt ratio, 89

    • effects of CAPDR economic integration with, viii, ix

    • global business cycle synchronization, 13–15, 14t

    • in global transmission of economic shocks, 15–16, 18, 19–21, 23

    • remittances from, 10

    • response to global financial crisis, 34

    • share of external liabilities in CAPDR, 9

    • structural vector autoregression modeling of crisis outcomes in CAPDR, 25–27

    • tourist travel to CAPDR from, 7–8n transmission channels for spillovers from, 28, 29f

    V

    Value added tax, 123–24, 124f, 126, 126n

    W

    Wage bill, 118, 120

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