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Western Hemisphere > Argentina

You are looking at 1 - 8 of 8 items for :

  • Type: Journal Issue x
  • Business Fluctuations; Cycles x
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Cover IMF Working Papers
Spillovers from Large Emerging Economies: How Dominant Is China?
Hany Abdel-Latif
and
Adina Popescu
This paper investigates the global economic spillovers emanating from G20 emerging markets (G20-EMs), with a particular emphasis on the comparative influence of China. Employing a Bayesian Global Vector Autoregression (GVAR) model, we assess the impacts of both demand-side and supply-side shocks across 63 countries, capturing the nuanced dynamics of global economic interactions. Our findings reveal that China's contribution to global economic spillovers significantly overshadows that of other G20-EMs. Specifically, China's domestic shocks have significantly larger and more pervasive spillover effects on global GDP, inflation and commodity prices compared to shocks from other G20-EMs. In contrast, spillovers from other G20-EMs are more regionally contained with modest global impacts. The study underscores China's outsized role in shaping global economic dynamics and the limited capacity of other G20-EMs to mitigate any potential negative implications from China's economic slowdown in the near term.
Keywords:
Emerging Economies; Growth Spillover; Global transmission; GVAR model; outsized role; China's contribution; IMF working paper No. 25/27; domestic shock; Spillovers; Supply shocks; Emerging and frontier financial markets; Oil prices; Global value chains; Global
Cover IMF Working Papers
Investor Sentiment, Sovereign Debt Mispricing, and Economic Outcomes
Mr. Ramzy Al Amine
and
Tim Willems
We find that countries which are able to borrow at spreads that seem low given fundamentals (for example because investors take a bullish view on a country's future), are more likely to develop economic difficulties later on. We obtain this result through a two-stage procedure, where a first regression links sovereign spreads to fundamentals, after which residuals from this regression are deployed in a second stage to assess their impact on future outcomes (real GDP growth and the occurrence of fiscal crises). We confirm the relevance of past sovereign debt mispricing in several out-of-sample exercises, where they reduce the RMSE of real GDP growth forecasts by as much as 15 percent. This provides strong support for theories of sentiment affecting the business cycle. Our findings also suggest that countries shouldn't solely rely on spread levels when determining their fiscal strategy; underlying fundamentals should inform policy as well, since historical relationships between spreads and fundamentals often continue to apply in the medium-to-long run.
Keywords:
WP; sub; cross-validation procedure; sentiment; sovereign debt; sovereign spreads; debt crises; over-optimism; growth forecasting; real GDP growth; credit rating; growth forecast; spread discount; Current account deficits; Government consumption; Southern Europe; leave-one-out procedure; spreads data; investor sentiment
Cover IMF Working Papers
Is the Public Investment Multiplier Higher in Developing Countries? An Empirical Exploration
Mr. Alejandro Izquierdo
,
Mr. Ruy Lama
,
Juan Pablo Medina
,
Jorge Puig
,
Daniel Riera-Crichton
,
Mr. Carlos A. Végh Gramont
, and
Guillermo Javier Vuletin
Over the last decade, empirical studies analyzing macroeconomic conditions that may affect the size of government spending multipliers have flourished. Yet, in spite of their obvious public policy importance, little is known about public investment multipliers. In particular, the clear theoretical implication that public investment multipliers should be higher (lower) the lower (higher) is the initial stock of public capital has not, to the best of our knowledge, been tested. This paper tackles this empirical challenge and finds robust evidence in favor of the above hypothesis: countries with a low initial stock of public capital (as a proportion of GDP) have significantly higher public investment multipliers than countries with a high initial stock of public capital. This key finding seems robust to the sample (European countries, U.S. states, and Argentine provinces) and to the identification method (Blanchard-Perotti, forecast errors, and instrumental variables). Our results thus suggest that public investment in developing countries would carry high returns.
Keywords:
WP; investment multiplier; Fiscal multiplier; Public investment; Stock of public capital; Crowding-in; multiplier estimate; public investment multiplier; multiplier calculation; government spending multiplier; Public investment spending; Stocks; Government consumption; Private investment; Global
Cover IMF Working Papers
Pricing Sovereign Debt in Resource-Rich Economies
Thomas McGregor
How do oil price movements affect sovereign spreads in an oil-dependent economy? I develop a stochastic general equilibrium model of an economy exposed to co-moving oil price and output processes, with endogenous sovereign default risk. The model explains a large proportion of business cycle fluctuations in interest-rate spreads in oil-exporting emerging market economies, particularly the countercyclicallity of interest rate spreads and oil prices. Higher risk-aversion, more impatient governments, larger oil shares and a stronger correlation between domestic output and oil price shocks all lead to stronger co-movements between risk premiums and the oil price.
Keywords:
WP; oil price; open economy; Risk premium; natural resources; sovereign debt; and default; development; cost parameter; policy makers; oil revenue cost; standard deviation terms; equilibrium bond price; oil price volatility; oil revenue cost of default; oil price state; steady-state price; steady state bond price; output volatility; Oil prices; Emerging and frontier financial markets; Asset prices; Consumption; Oil; gas and mining taxes; Global; Sub-Saharan Africa; Asia and Pacific
Cover IMF Working Papers
A General Equilibrium Model of Sovereign Default and Business Cycles
Miss Zhanwei Z. Yue
and
Mr. Enrique G. Mendoza
Emerging markets business cycle models treat default risk as part of an exogenous interest rate on working capital, while sovereign default models treat income fluctuations as an exogenous endowment process with ad-noc default costs. We propose instead a general equilibrium model of both sovereign default and business cycles. In the model, some imported inputs require working capital financing; default on public and private obligations occurs simultaneously. The model explains several features of cyclical dynamics around default triggers an efficiency loss as these inputs are replaced by imperfect substitutes; and default on public and private obligations occurs simultaneously. The model explains several features of cyclical dynamics around deraults, countercyclical spreads, high debt ratios, and key business cycle moments.
Keywords:
WP; debt ratio; working capital; Sovereign default; business cycles; country risk; external debt; default event; default frequency; default probability; credit market; transmission mechanism; result default; default incentive; country default; sensitivity analysis; utility function; default punishment; Total factor productivity; Labor supply; Debt default; Eastern Europe; Western Hemisphere; Western Europe; Africa
Cover IMF Working Papers
Common Factors in Latin America's Business Cycles
Mr. Allan Timmermann
,
Mr. Luis Catão
, and
Mr. Marco Aiolfi
This paper constructs new business cycle indices for Argentina, Brazil, Chile, and Mexico based on common dynamic factors extracted from a comprehensive set of sectoral output, external data, and fiscal and financial variables spanning over a century. The constructed indices are used to derive a business cycle chronology for these countries and characterize a set of new stylized facts. In particular, we show that all four countries have historically displayed a striking combination of high business cycle and persistence relative to benchmark countries, and that such volatility has been time-varying, with important differences across policy regimes. We also uncover a sizeable common factor across the four economies which has greatly limited scope for regional risk sharing.
Keywords:
WP; real GDP; standard deviation; economic activity; government spending; Business Cycles; Factor Models; Latin America; business cycle volatility; shortening business cycle length; volatility in Latin America; time series; backcasted business cycle; density function; business cycle driver; Terms of trade; Economic recession; Global; Middle East; Africa; Asia and Pacific
Cover IMF Staff Country Reports
Uruguay: Fifth Review Under the Stand—By Arrangement and Requests for Modification of the Arrangement and Waiver of Nonobservance and Applicability of Performance Criteria—Staff Report; Staff Supplement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Uruguay
International Monetary Fund
This paper examines Uruguay’s Fifth Review Under the Stand-By Arrangement and Requests for Modification of the Arrangement and Waiver of Nonobservance and Applicability of Performance Criteria. The macroeconomic framework is broadly on track, but progress with structural reform remains uneven. Fiscal performance has been better than programmed, reflecting buoyant revenues. The monetary and balance-of-payments targets of the program have been met. Although program risks have diminished further since the last review, important vulnerabilities remain, leaving no room for policy slippages.
Keywords:
ISCR; CR; SDR; asset management firm; asset disposal strategy; inflation target range; central bank; Banco de Crédito; liquidated bank; Uruguay's performance; Bank liquidation; Currencies; Commercial banks; Global; Europe
Cover IMF Survey
IMF Survey, Volume 31, Issue 22
International Monetary Fund. External Relations Dept.
IMF economists and researchers from outside the institution gathered at the IMF’s Third Annual Research Conference on November 7-8. The conference had an overarching theme of capital flows and global governance but also dealt with an eclectic array of other issues that economists at the IMF and elsewhere are exploring.
Keywords:
SV; IMF Concludes; IMF's website; SRF disbursement; governance; IMF executive board reviews data provision; IMF publication service; IMF decision; IMF procedure; Collective action clauses; Economic recession; Capital flows; Income inequality; Gold; Global; Central America; Sub-Saharan Africa