International Monetary Fund. Western Hemisphere Dept.
This 2015 Article IV Consultation highlights that the economic situation of St. Kitts and Nevis has continued to improve since the completion of the IMF-supported home-grown economic program in July 2014. Continued rapid inflows under the Citizenship-By Investment program have led to a surge in construction activity, and supported a large increase in government and Sugar Industry Diversification Fund investments and spending, including on the People Employment Program. These factors, together with the ongoing recovery in tourist arrivals fueled rapid GDP growth of about 6 percent in 2013 and 2014. The near-term outlook remains strong, but there are risks on the horizon.
The paper presents a model of optimum currency areas using a general equilibrium approach with regionally differentiated goods. The choice of a currency union depends upon the size of the underlying disturbances, the correlation between these disturbances, the costs of transactions across currencies, factor mobility across regions, and the interrelationships between demand for different goods. It is found that, while a currency union can raise the welfare of the regions within the union, it unambiguously lowers welfare for those outside the union. [JEL F33, F36]
The paper examines recent episodes of government involvement in corporate debt restructurings. It argues that corporate debt restructuring is an important step toward recovery from a financial crisis. We then discuss the rationale for, and modalities of, the state intervention in corporate debt workouts through reviewing six countries with large scale corporate debt workouts. Case studies reveal that the costs of corporate sector rescue are significant and in several cases on par with the costs of financial sector bailouts. The paper sheds light on the importance of contingent liabilities and associated risks to government balance sheet from the corporate debt side and emphasizes the need for improved contingency planning for corporations with potential systemic impact.
Mr. John Kiff, Jihad Alwazir, Sonja Davidovic, Aquiles Farias, Mr. Ashraf Khan, Mr. Tanai Khiaonarong, Majid Malaika, Mr. Hunter K Monroe, Nobu Sugimoto, Hervé Tourpe, and Peter Zhou
This paper examines key considerations around central bank digital currency (CBDC) for
use by the general public, based on a comprehensive review of recent research, central
bank experiments, and ongoing discussions among stakeholders. It looks at the reasons
why central banks are exploring retail CBDC issuance, policy and design considerations;
legal, governance and regulatory perspectives; plus cybersecurity and other risk
considerations. This paper makes a contribution to the CBDC literature by suggesting a
structured framework to organize discussions on whether or not to issue CBDC, with an
operational focus and a project management perspective.