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IMF POLICY PAPER
2021 COMPREHENSIVE SURVEILLANCE REVIEW—BACKGROUND PAPER ON THE SURVEILLANCE PRIORITY PREEMPTING AND MITIGATING SPILLOVERS
May 2021
IMF staff regularly produces papers proposing new IMF policies, exploring options for reform, or reviewing existing IMF policies and operations. The following documents have been released and are included in this package:
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International Monetary Fund
Washington, D.C.
© 20[xx] International Monetary Fund
2021 Comprehensive Surveillance Review—Background Paper on the Surveillance Priority Preempting and Mitigating Spillovers
April 7, 2021
EXECUTIVE SUMMARY
The scope for spillovers that may significantly influence the effective operation of the international monetary system is increasing, as the complexity of international networks has evolved and new sources as well as channels, such as health policies, climate change or digital currencies, have been growing in significance. The COVID-19 pandemic has further underscored the sheer scale of global interconnectedness and potential for large spillovers. Against this background, the Fund is uniquely placed to monitor and assess economic and policy spillovers across countries.
The Fund has a range of modalities and tools to cover spillovers. However, there remains scope to enhance synergies between global and country-specific spillover coverage and to foster cross-country dialogue. Practical guidance and enhanced information-sharing would also allow for more systematic surveillance of spillovers. Furthermore, the COVID-19 pandemic has underscored the need to continue expanding the research frontier covering new spillovers and channels and developing new tools and data sets. Therefore, filling these remaining gaps in the Fund’s spillover work would allow for a more coordinated and evenhanded surveillance of spillovers.
Approved By
Ceyla Pazarbasioglu
Prepared by a staff team from the Strategy, Policy, and Review Department, comprising Borislava Mircheva, Johanna Schauer, and Yuanchen Yang under the overall guidance of Fabian Bornhorst, Rupa Duttagupta, and Sanjaya Panth (all SPR). The paper benefitted from discussions with Oya Celasun, Lone Christiansen, and Florence Jaumotte (RES) and earlier contributions from Ashvin Ahuja, Balazs Csonto, David De Padua, and Dora Douglass Kochman.
Contents
INTRODUCTION
THE FUND'S SPILLOVER COVERAGE IN A RAPIDLY EVOLVING LANDSCAPE
A. Developments in the Spillover Landscape
B. Goal and Scope of the Fund’s Spillover Coverage
C. Previous and Ongoing Fund Work
OPERATIONAL CONSIDERATIONS
BOXES
1. Spillovers: Key Concepts
2. Network Analysis of Global Integration
3. Chronology of the Fund's Spillover Work
4. WEO Spillover Chapters
5. Coverage of Spillovers in 2018–19 Staff Reports for Systemic Countries
6. Spillover Discussion in Article IV Staff Reports Since the Start of the COVID-19 Pandemic
FIGURES
1. Current Fund Modalities Contributing to Spillover Coverage
2. Discussion of Spillovers in Article IVs
3. Illustration of Updated Spillover Modalities
TABLE
1. Coverage of Different Types of Spillovers in Fund Products
ANNEX
I. Structured Interviews with Policymakers and Fund Staff on Spillover Issues
References