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Poul Høst-Madsen

This Paper examines the concepts of surplus or deficit applied by countries in analyzing their balance of payments position.1 These concepts may be classified into two broad categories, which are here referred to as “basic” and “over-all” surplus or deficit. The ideas underlying “basic” and “over-all” balances are analyzed, and the surplus or deficit concepts applied by a number of countries are related to these two categories. It is found that some countries, e.g., Germany and Japan, apply a concept of surplus or deficit mainly in terms of their “over-all” balance of payments position, whereas other countries, e.g., the United Kingdom, apply a concept that corresponds more closely to the “basic” balance. However, most countries apply a mixture of the two concepts. The varying content of the concept of surplus or deficit is not apparent in public discussion, in which it is often implicitly assumed that the deficit of one country must have a counterpart in a surplus elsewhere.

Gian Maria Milesi-Ferretti

Crisis Stalls Globalization: Reshaping the World Economy" examines the multiple facets of the recession-from the impact on individual economies to the effect on the global payments imbalances that were partially at the root of the crisis-and offers a variety of suggestions for supporting a recovery and averting future crises. Several IMF studies shed light on the depth of the crisis-including a survey of the sharp drop in trade finance, along with quantitative findings about the direct and indirect costs of the financial turbulence-and debate what is to be done from several angles, including the redesign of the regulatory framework and ways to plug large data gaps to prevent future crises and aid in the creation of early warning systems. Opinion pieces discuss the shifting boundaries between the state and markets, the agenda for financial sector reform, and the governance of global financial markets. The issue also includes a historical perspective to see when restructuring the global financial architecture actually succeeds. "People in Economics" profiles Nouriel Roubini; "Back to Basics" looks at what makes a recession; and "Data Spotlight" examines Latin America's debt.

GENBERG HANS

Intervention in the foreign exchange market has been, and continues to be, an important feature of the conduct of economic policy in the present system of widespread floating. Central banks may buy or sell foreign exchange for a number of reasons. They may “lean against the wind” of short-run fluctuations in exchange rates in order to promote “orderly market conditions,” or lean against the wind of longer-term movements in attempts to influence trendlike appreciations or depreciations. Alternatively, they may attempt to speed up adjustments by purchasing or selling foreign exchange when the domestic currency is depreciating or appreciating. Finally, they may buy or sell foreign assets for other reasons than to influence the exchange rate, such as to alter the domestic money supply or to finance government imports or exports. Whatever their intentions, the consequences of central banks’ actions for exchange rate movements will depend critically on what type of domestic asset constitutes the counterpart to the purchases or sales of foreign exchange and on the reactions of the private sector and foreign central banks to these purchases. The purpose of this paper is to review the current state of knowledge about the effectiveness of intervention policy from both theoretical and empirical perspectives. The issue on which attention is focused concerns the extent to which intervention in the foreign exchange market can be considered to be different from general monetary policy—in other words, on the question of whether central banks can use money supply control and intervention policies independently. The answer to this question obviously has important implications for national monetary authorities’ conduct of monetary policy and for the International Monetary Fund’s monitoring of the exchange rate policies of its members.

International Monetary Fund
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.
International Monetary Fund
This Selected Issues paper for Japan illustrates the impact of fiscal and structural reforms on the Japanese and world economies. Japan faces a sizable fiscal deficit, against a backdrop of weak trend growth and growing imbalances in the world economy. Moreover, upward pressure on health care and social security spending owing to an aging population will add significantly to strains on public resources in the near future. The Japanese government is taking a range of measures aimed at raising productivity growth and stabilizing the public debt in relation to GDP over the medium term.
International Monetary Fund
This report provides the IMF's projections and estimates on Niger's gross domestic product by sector at current market prices; gross domestic product of the modern and traditional sector at current market prices; gross domestic product at constant 1987 prices; government revenue and grants; monetary survey; summary accounts of the central and commercial banks; interest rates on money markets, during 1994–99; rediscount rates applied by the central bank, 1989–99; lending applied by commercial banks, 1988–99; deposit rates applied by the commercial banks, 1989–99; summary of the tax system, as of September 30, 2000, and so on.
International Monetary Fund
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.
Mr. Robert P Flood
The paper discusses a model in which growth is a negative function of fiscal burden. Moreover, growth discontinuously switches from high to low as the fiscal burden reaches a critical level. The paper provides an overview of key elements of corporate bankruptcy codes and practice around the world that are relevant to the debate on sovereign debt restructuring. It also describes the broad trends in international financial integration for a sample of industrial countries and explains the cross-country and time-series variation in the size of international balance sheets.
International Monetary Fund
The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
International Monetary Fund
This paper examines external adjustment in the U.S., Japan and Germany from the perspective of net foreign asset positions. It asks two questions: What are, in the long run, the determinants of net foreign asset equilibrium? and: What are, in the short run, the adjustment mechanisms sustaining that equilibrium? An analysis of postwar data produces two insights. First, using a cointegration approach, the existence of long-run net foreign asset equilibrium can be identified; in each of the G-3 countries, it is a function of demographic variables and public debt. Second, deviations from the long-run equilibrium give rise to disequilibrium feedback through domestic absorption and through other channels.