International Monetary Fund. Communications Department
This chapter takes stock of the world’s development agenda, examining how to best seize this opportunity. Government officials and representatives from civil society organizations, donor groups, and the private sector are scheduled to meet in Addis Ababa, Ethiopia, to secure the financing needed to lift millions out of extreme poverty. Participants at the United Nations summit on climate change in Paris are expected to work toward a set of environmental targets aimed at ensuring a sustainable future. The chapter also presents an argument that the world needs strong deals in Addis Ababa on financing and in Paris on climate to deliver sustainable progress.
Over the last two decades, Tunisia has carried out a wide ranging reform program based on improving the competitiveness of the economy, enhancing the business environment, and increasing trade openness. Tunisia weathered the international crisis relatively well. Tunisia growth could reach 3.8 percent in 2010 if global growth recovers as expected. Prudent fiscal policy in 2010 can be geared toward supporting growth and mitigating the impact of the weak global environment. The tax regime could become more business-friendly.
This Selected Issues paper for Tunisia presents a literary survey of the research on constant real exchange rate rule (CRERR). It assesses Tunisia’s experience with CRERR in terms of inflation performance and discusses possible reasons for Tunisia’s apparent success at avoiding the pitfalls of CRERR as predicted by the theoretical models. The paper presents a regression analysis estimating the equilibrium real exchange rate based on different fundamental variables and compares this with the path of the actual exchange rate. The paper also assesses Tunisia’s external competitiveness over the past decade using a range of indicators.
This paper points out that while many developing countries seek to increase their export earnings, they have not embraced fully the notion that their own pattern of import protection hurts their export performance. The paper quantifies the extent to which import protection acts as a tax on a country's export sector and finds that for many developing countries, the magnitude of the implicit tax is substantial-about 12 percent, on average, for the countries studied. The paper also illustrates the effects of various tariff-cutting scenarios in the Doha Round on export incentives and concludes that, in general, developing countries could increase their export earnings by reducing their own import tariffs, but countries must be careful about how these tariff reductions are achieved. For example, tariff-cutting schemes that exempt certain sectors could actually be harmful.
Mr. Nooman Rebei and Mr. Mohamed Safouane Ben Aissa
This paper investigates optimized monetary policy rules in the presence of government intervention to stabilize prices of certain categories of goods and services. The paper estimates a small-scale, structural equilibrium model with a sticky-price sector and a subsidized price sector for a large number of countries using Bayesian methods. The main result of this paper is that strict headline inflation targeting could be outperformed by sectoral inflation targeting, output gap stabilization, or a combination of these. In addition, several country cases exhibit lower performance of both headline and core inflation stabilization, the two most common policies in modern central banks' practices. For practical monetary policy design, we numerically identify country specific thresholds for the degree of government intervention in price setting under which core inflation targeting turns out to be the optimal choice in the context of implementable Taylor rules.