Back Matter

Back Matter

Author(s):
R. Gelos
Published Date:
March 2014
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    Index

    Page numbers followed by f, n, or t refer to figures, footnotes, or tables, respectively.

    B

    • Balance of payments

      • carry trade and, 100

      • exchange rate and, 113

      • external conditions and, 109, 111t, 114t

      • shocks, 37

    • Bayesian techniques, 17

    • Brazil

      • capital inflows into, 83–84

      • derivatives market, 84

      • foreign investment in, 84, 85f

    • Broad money, 40, 41f

    • Budget cycles, 120, 123, 133

    • Business cycle

      • expenditure smoothing and, 124

      • fiscal behavior and, 126f

      • public debt targeting and, 133–138

      • structural balance rules and, 123

    C

    • Capital controls

    • CFMs, 91–98

      • effectiveness of, 99, 102

      • IOF imposition, 90–91

    • Capital flows

      • composition of, 93–96

      • currency appreciation and, 7, 12–13

      • exchange rate and, 92–93, 113

      • monthly, 93t

    • Capital flows management measures (CFMs)

      • downsides of, 97–98

      • IOF imposition and, 90–91

      • role and effectiveness, 91–98, 102–103

    • Capital inflows

      • into Brazil, 83–84

      • currency appreciation and, 7, 12–13

      • Dutch disease phenomenon and, 14

      • economic growth and, 21

      • emerging markets and, 85f

      • exchange rate and, 86

      • gross and net, 84f, 87f

      • introduction to, 1–2

      • policy response, 86–91

      • predicted and actual, 87f

      • stylized facts on, 84–86

    • Capital market development, 159, 160f, 167

    • Caribbean countries

      • budget issues, 139

      • fiscal framework proposal for, 125–133

    • Carry trade

      • in the futures market, 89, 100, 101f

      • monetary policy and, 96–97

    • Central America, international reserve accumulation in, 38–44, 51

    • Chicago Board of Options Exchange Volatility Index (VIX), 106, 107f

    • Choleski decomposition, 155

    • Commodity exporters, 44, 106, 173

    • Commodity prices, 8f, 96, 172n

    • Consumer price index (CPI) inflation, 175, 177t, 182, 183f

    • Consumption insurance, 44, 45, 49, 50, 56

    • Credit dollarization

      • capital market development and, 159, 160f

      • by category, 153f

      • changes in, 154n

      • decline in, 151

      • empirical approach, 155

      • impulse responses and, 160–161

      • variance decomposition, 166t

      • See also Deposit dollarization

    • Credit growth, 89, 90, 107, 108, 111t

    • Credit markets, 173, 184

    • Credit-to-output ratio, 184, 185

    • Currency appreciation

      • capital flows and, 7, 12–13

      • CFMs and, 91, 92

    • Current account balance (CAB), 63, 64f, 67, 71–72f, 77f, 78t

    • Current account norms

      • conditional distribution of, 70f

      • fixed-effects panel regression and, 75t

      • introduction to, 61

      • net foreign assets and, 73t

    • Cyclically adjusted primary balances, 134, 135t

    D

    • Debt-to-GDP ratio, 43, 125, 131, 133, 137, 138

    • Dedollarization

      • decline in, 151

      • decomposition of, 154t

      • empirical approach, 154–160

      • empirical results, 160–167

      • exchange rate and, 150, 163

      • inflation and, 150, 167

      • introduction to, 149–150

      • monetary policy and, 186–187

      • reserve requirements and, 160

      • short-term drivers of, 151, 166–167

      • stylized facts, 151–154

    • De-industrialization, 9, 14, 23

    • Deposit dollarization

      • decline in, 151, 152, 164

      • empirical approach, 155

      • impulse responses and, 160–161

      • by maturity, 153f

      • variance decomposition, 166t

    • Derivatives market, 84, 85, 90t, 97, 98

    • Developing economies

      • domestic impact for, 107–108

      • econometric regression and, 108–112

      • exchange rate regimes and, 112–116

      • external environment for, 105–107

      • See also Emerging markets

    • Dollar deposits, 44, 45, 46, 47, 48, 149n

    • Dollarization

      • banking sector, 174f

      • conclusion about, 167–168

      • decline in, 153, 156, 167

      • description of, 149

      • exchange rate and, 157–158f, 163f 164f

      • forced, 150

      • in Latin American countries, 150f, 152f

      • prudential measures and, 162f

      • public bonds and, 162f

      • reserve requirements and, 161f

      • See also Dedollarization; Monetary policy transmission

      • Domestic bonds, 42, 84, 90, 97

      • Domestic demand, 107, 108, 109–110f, 114t, 116

      • Domestic savings, 10, 22, 97

      • Dutch disease phenomenon

        • application and empirical studies, 16–20, 25f

        • economic growth and, 7, 13

        • effects of, 14

        • exchange rate and, 16

        • fiscal policy and, 28

        • foreign-aid-induced, 14–15

        • literature review in numbers, 23–27

        • low-income countries and, 15

        • negative implications of, 15

        • net foreign assets and, 14

        • policy discussion, 27–29

        • real appreciation and, 11–12

        • RER and, 9–11, 15

        • theory related to, 12–16

        • See also Real exchange rate (RER)

      • Dynamic stochastic general equilibrium (DSGE), 17

    E

    • Economic growth

      • Dutch disease phenomenon and, 7, 13

      • fear of appreciation on, 22

      • foreign aid and, 17–18

      • real exchange rate and, 7–8, 10, 20–22, 26f, 27

    • Emerging markets

      • capital inflows and, 85f

      • macroeconomic indicators, 109–110f

      • quantile regression framework and, 77–78

      • REER in, 8f

      • reserve holdings of, 37, 38, 39–40f, 51

    • Equilibrium exchange rate, 61, 63–67

    • Equilibrium phenomenon, 8, 11, 27, 29

    • Exchange rate

      • adjustment, 63–64

      • assessment of, 61, 62, 70

      • capital flows and, 92–93, 113

      • capital inflows and, 86

      • dedollarization and, 150, 163

      • dollarization and, 156, 157–158f, 163f, 164f

      • Dutch disease phenomenon and, 16

      • inflation and, 182, 183f

      • interest rate and, 182

      • IOF imposition and, 88f

      • misalignment, 62

      • nominal, 142, 143, 157f

      • volatility, 27, 156, 158f, 161, 163, 164f

    • Exchange rate flexibility

      • domestic demand and, 113

      • exchange rate regimes and, 112–116

      • export and imports and, 113

      • reserve holdings and, 41, 43

      • Exports and imports, 43, 62, 63, 107, 109, 110

    F

    • Factor reallocation, 12, 23, 24–25f, 27, 29

    • FDI inflows, 94, 95

    • Financial dollarization. See Dollarization

    • Fiscal adjustment, 66f, 86–87

    • Fiscal balances, 65, 72, 73, 76, 78, 115t

    • Fiscal policy

      • Dutch disease phenomenon and, 28

      • fiscal framework proposal and, 121–123, 140–141

      • introduction to, 2

      • passive, 131–132f

    • Fixed-effects panel regression, 70, 75–76f

    • Foreign aid

      • Dutch disease phenomenon and, 14–15

      • growth and, 17–18

      • low-income countries and, 18

      • real exchange rate and, 18

      • shocks to, 24f

    • Foreign currency debt, 41, 52t, 129, 158

    • Foreign exchange inflows, 8, 11

    • Foreign investment, 84, 85f 101f

    • Forward prices, 102–103

    • Futures market, 97, 100, 101f

    G

    • Greenspan-Guidotti rule, 39, 41, 44, 57

    • Growth. See Economic growth

    I

    • Impulse response functions, 160, 180, 181f 183f 185

    • Increasing-returns-to-scale (IRS) sector, 19

    • Inflation

      • actual and expected, 175, 176f

      • average annual, 156f

      • dedollarization and, 150, 167

      • dollarization and, 149

      • domestic currency and, 186f

      • exchange rate and, 182, 183f

      • policy rate and, 177t

    • Inflation targeting regime, 171, 172n, 180, 187

    • Intercompany loans, 94, 95f

    • Interest rate

      • domestic and futures-implied, 98f, 102

      • exchange rate and, 182

      • high, 84, 89, 96

      • IOF imposition and, 103f

      • nominal, 84, 142, 143

      • pass-through, 177–178, 179t

      • See also Monetary policy

    • International reserve accumulation

      • actual vs. optimal, 44–50, 58–59f

      • broad money and, 41f

      • data sources, 52t

      • defined, 38n

      • evolution of, 39f

      • median, 112f

      • in months of imports, 39f

      • rationale for, 37

      • reserve demand regressions and, 40–43, 53t

      • rules of thumb for, 38–43

      • short-term debt and, 40f

    • IOF imposition

      • carry trade and, 96–97

      • exchange rate and, 88f

      • interest rate and, 103f

      • as a new measure, 90–91

      • regulatory changes affecting, 90t

      • See also Capital flows management measures (CFMs)

    J

    • “Joneses” variables, 42, 43

    L

    • Latin America

      • current account balances and, 77f 78t

      • dollarization in, 150f 152f

      • international reserves and, 37, 38, 39f, 41 f

    • Learning by doing (LBD) spillover effects, 9, 13, 15, 16, 17, 18

    • Lending rates, 177, 178f 179t

    • Low-income countries

      • Dutch disease phenomenon and, 15

      • foreign aid and, 18

    M

    • Maastricht Treaty, 123

    • Macroeconomic balance approach

      • for assessing equilibrium exchange rate, 63–67

      • development of, 61

      • purpose of, 62

    • Macroeconomic framework, medium-term, 122–123

    • Macroprudential instruments, 88–90

    • Manufacturing sector, 14, 18, 20, 28

    • Medium-term macroeconomic framework, 122–123

    • Monetary policy

      • carry trade and, 96–97

      • dedollarization and, 186–187

      • introduction to, 2–3

    • Monetary policy transmission

      • data sources, 188–190t

      • empirical analysis of, 179–183

      • exchange rate and, 182

      • financial factors’ role in, 183–187

      • interest rate and, 177–179

      • policy rate and, 176, 177t, 178f

    • Money market rate, 172, 178, 179t, 180, 188t

    • Monte Carlo simulation, 128–130, 133, 134t, 135t, 137t, 141

    N

    • Natural resource shocks, 9, 11, 12, 18–19

    • Net foreign assets (NFA)

      • current account norms and, 73t

      • Dutch disease phenomenon and, 14

      • pooled OLS and, 67, 74f

    • New Zealand, 173, 175, 177t, 178, 179t, 180–187

    • Nondeliverable currency forwards (NDFs), 85, 97, 102, 103

    • Non-dollarized economies, 38, 172n

    • Nontradable goods, 9, 12, 13, 14, 15, 27

    O

    • Oil-exporting countries, 20, 62, 63, 65

    • Old-age dependency ratio, 65, 75, 76

    P

    • Peer or “Joneses” effects, 42, 51

    • Pooled ordinary least squares (OLS), 67, 70, 72f, 73, 74f, 75

    • PPP-GDP per capita, 65, 71t, 73t, 75

    • Primary expenditures

      • cyclical properties of, 136–137

      • debt-to-GDP ratio and, 131, 133

      • financial variables and, 125

      • public debt projections and, 129–130

    • Primary expenditure smoothing, 122, 124,133–135

    • Probability of a crisis, 50

    • Prudential measures, 158–161

    • Public bonds, 159, 161, 162f 166

    • Public debt targeting

      • business cycle and, 133–138

      • Caribbean countries and, 125–133

      • debt-to-GDP ratio under, 131–132f

      • dispersion and, 137t

      • introduction to, 119–120

      • smoothing properties of, 134t

      • sovereign debt dynamics and, 141–144

      • structural balance rules and, 123–124

    • Purchasing power parity (PPP), 20, 21, 64, 65

    Q

    • Quantile regression approach

      • for assessing equilibrium exchange rate, 67–69

      • description of, 62

      • fixed-effects panel regression and, 76f

      • Latin America and, 77–78

      • pooled OLS and, 72f, 74f

    R

    • Real appreciation, 86, 93f

    • Real effective exchange rate (REER)

      • in emerging markets, 8f

      • percent a year, 111 f

      • savings-investment norm and, 63, 64f

    • Real exchange rate (RER)

      • application, 9–13, 17–18, 28–30

      • competitive, 22

      • Dutch disease phenomenon and, 9–11, 15

      • economic growth and, 7–8, 10, 20–22, 26f, 27

      • foreign aid and, 18

      • misalignment and instability, 20, 21, 24, 25, 26f, 29

      • undervalued, competitive or overvalued, 10, 21, 22

    • Remittances, impact of, 16–17, 23, 24f

    • Reserve accumulation, 43, 51, 86, 92, 93t

    • Reserve cover

      • conclusion about, 51

      • models of, 44–50

      • rules of thumb for, 38–43

    • Reserve requirements

      • capital inflows and, 88, 89, 113

      • dedollarization and, 160

      • dollarization and, 161 f

      • IOF imposition and, 90t, 97

      • raising of, 159n

    • Reserves-to-GDP ratio, 42, 47, 50

    • Risk aversion parameter, 49

    S

    • Savings-investment norms

      • assessment of, 63

      • determinants of, 64–66

      • econometric models for, 67

      • estimation of, 62, 78–79

      • fiscal adjustment on, 66f

      • fitted values of, 71t

      • REER and, 63, 64f

    • Short-term foreign currency debt, 41, 52t

    • Size of output loss, 50

    • Sovereign debt dynamics, 141–144

    • Spillover effects, 9, 21, 28

    • Structural balance rules, 123–124, 135, 136, 139

    T

    • Term premium, 49–50

    • Terms of trade

      • export and import growth and, 109

      • improvement in, 106, 107–108f

    • Tradable goods, 9, 13, 14, 15

    • Trade openness, 173, 174f

    U

    • Unemployment, 13, 14, 15

    • U.S. dollar interest rate, 46, 95, 102, 103f

    V

    • Variance decompositions, 125n, 126f 160, 166t

    • Vector autoregression (VAR) model, 127–128, 155t, 172, 185

    W

    • World growth, 106f, 110, 115

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