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IMF staff papers

Robert Flood

Editor and Committee Chair

Ayhan Kose

Co-Editor

David Einhorn

Assistant Editor

Editorial Committee

Eduardo Borensztein

Tito Cordella

Giovanni Dell’Ariccia

Enrica Detragiache

Atish R. Ghosh

Olivier Jeanne

Andrei Kirilenko

Laura Kodres

Prakash Loungani

Donald J. Mathieson

Gian Maria Milesi-Ferretti

Chris Papageorgiou

Jorge Roldos

Antonio Spilimbergo

The objective of IMF Staff Papers is to publish high-quality research on a variety of topics of interest to a broad audience including academics and policymakers in the member countries of the Fund. IMF Staff Papers is open to outside submissions. The papers selected for publication in the journal are subject to an extensive review process using both internal and external referees. IMF Staff Papers also welcomes outside comments, criticisms, and interesting replications of published work. The views presented in published papers are those of the authors and should not be attributed to or reported as reflecting the position of the IMF, its Executive Board, or any other organization mentioned herein.

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E-mail: publications@imf.org

Internet: www.palgrave-journals.com/imfsp

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International Monetary Fund

Volume 56 Number 4

IMF staff papers

2009

Editor’s Note

The Editor invites from contributors outside the IMF brief comments (not more than 1,000 words) on published articles in IMF Staff Papers. These comments should be addressed to the Editor, who will forward them to the author of the original article for reply. Both the comments and the reply will be considered for publication.

The data underlying articles published in IMF Staff Papers (where available) may be obtained from the journal’s website (www.palgrave-journals.com/imfsp). Readers are invited to use these data to expand on the material in the articles, and the journal will consider publishing such work.

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© 2009 by the International Monetary Fund

ISBN 978-1-58906-910-7

International Standard Serial Number: ISSN 1020-7635

This serial publication is catalogued as follows:

International Monetary Fund

IMF staff papers—International Monetary Fund. v. 1– Feb. 1950– [Washington] International Monetary Fund.

v. tables, diagrs. 26 cm.

Three no. a year, 1950–1977; four no. a year, 1978–

Indexes:

Vols. 1–27, 1950–80, 1 v.

ISSN 1020–7635 = IMF staff papers—International Monetary Fund.

1. Foreign exchange—Periodicals. 2. Commerce—Periodicals.

3. Currency question—Periodicals.

HG3810.15

332.082

53-35483

Contents

• The Costs of Sovereign Default

  • Eduardo Borensztein and Ugo Panizza

Contents

• On the Probabilistic Approach to Fiscal Sustainability: Structural Breaks and Non-Normality

  • Nathaniel Frank and Eduardo Ley

Contents

• External Linkages and Contagion Risk in Irish Banks

  • Elena Duggar and Srobona Mitra

Contents

• Foreign Aid with Voracious Politics

  • Alex Mourmouras and Peter Rangazas

Contents

• What Explains the Rapid Growth in Transition Economies?

  • Garbis Iradian

• The Optimal Level of Reserves for Low-Income Countries: Self-Insurance against External Shocks

  • Regis Barnichon

• Are Africa’s Currency Unions Good for Trade?

  • Charalambos Tsangarides, Pierre Ewenczyk, Michal Hulej and Mahvash Saeed Qureshi

• International Competitiveness of the Mediterranean Quartet: A Heterogeneous-Product Approach

  • Herman Z. Bennett and Ziga Zarnic

Contents

• Dynamic Aspects of Productivity Spillovers, Terms of Trade and The “Home Market Effect”

  • Ippei Fujiwara and Naohisa Hirakata