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International Monetary Fund. External Relations Dept.
The Web edition of the IMF Survey is updated several times a week, and contains a wealth of articles about topical policy and economic issues in the news. Access the latest IMF research, read interviews, and listen to podcasts given by top IMF economists on important issues in the global economy. www.imf.org/external/pubs/ft/survey/so/home.aspx
Mr. Andrew J Swiston
This paper investigates Central America's external linkages over the last fifteen years of increased integration in light of the 2008-09 global recession. Using structural VAR models, it is found that a one percent shock to U.S. growth shifts economic activity in Central America by 0.7 to 1 percent, on average. Spillovers from global shocks and the rest of the region also affect activity in some countries. Spillovers are mostly transmitted through advanced country financial conditions and fluctuations in external demand for Central American exports. Shocks to advanced economies associated with the 2008-09 financial crisis lowered economic activity in the region by 4 to 5 percent, on average, accounting for a majority of the observed slowdown. The impact was almost twice as large as elasticities estimated on pre-crisis data would have predicted. These results underscore the importance of operating credible policy frameworks that enable a countercyclical policy response to external shocks.
International Monetary Fund. External Relations Dept.

Leo Van Houtven met recently with the IMF Survey to elaborate on remarks he delivered at an IMF Economic Forum on governance in the IMF, held on September 17 (see box). Responding to questions about the IMF’s record, he offered his views about what the IMF has done well and where it needs to improve. He emphasized the IMF’s demonstrated ability to adapt to fundamental changes in the international monetary system and in the world economy in a way that benefits all members of the international community. He also praised the IMF’s record of decision making by consensus, which ensures that policies are set collaboratively.

Mr. Graham Hacche

Over the past 15 years, central banks have made enormous progress on the monetary policy front. But on the financial stability side, much remain: to be done, according to Professor Charles Goodhart of the London School of Economics and formerly of the Bank of England. Presenting a Per Jacobsson Foundation Lecture in Zurich, Switzerland, on June 27, to an audience mainly of governors and other central bank officials attending the Annual Meeting of the Bank for International Settlements (BIS), he argued that central banks will need to take some new directions if they are to make comparable progress on financial stability.