Front Matter
  • 1, International Monetary Fund
  • | 2, International Monetary Fund
  • | 3, International Monetary Fund

Title Page

Research Department Strategy, Policy, and Review Department

Macroeconomic Research in Low-Income Countries

Advances Made in Five Key Areas Through a DFID-IMF Collaboration

Prepared by Hites Ahir, Mattia Coppo, Hendre Garbers, Giovanni Melina, Futoshi Narita (lead), D. Filiz Unsal (all RES), Vivian Malta, Xin Tang (both SPR), Daniel Gurara (AFR), Luis-Felipe Zanna (ICD), and Linda G. Venable (IMF Library) under the guidance of Kangni Kpodar (SPR) and Chris Papageorgiou (RES)

Copyright Page

Copyright ©2021 International Monetary Fund

Cataloging-in-Publication Data IMF Library

Names: Ahir, Hites. | Coppo, Mattia. | Garbers, Hendre. | Melina, Giovanni. | Narita, Futoshi. | Unsal, D. Filiz. | Malta, Vivian. | Tang, Xin (Economist). | Gurara, Daniel. | Zanna, Luis-Felipe. | Venable, Linda G. | Kpodar, Kangni. | Papageorgiou, Chris. |

International Monetary Fund. Research Department, issuing body. | International Monetary Fund. Strategy, Policy, and Review Department, issuing body. | International Monetary Fund, publisher.

Title: Macroeconomic research in low-income countries : advances made in five key areas through a DFID-IMF collaboration / Prepared by Hites Ahir, Mattia Coppo, Hendre Garbers, Giovanni Melina, Futoshi Narita (lead), D. Filiz Unsal (all RES), Vivian Malta, Xin Tang (both SPR), Daniel Gurara (AFR), Luis-Felipe Zanna (ICD), and Linda G. Venable (IMF Library) under the guidance of Kangni Kpodar (SPR) and Chris Papageorgiou (RES).

Other titles: Advances made in 5 key areas through a DFID-IMF collaboration. | International Monetary Fund. Research Department (Series). | International Monetary Fund. Strategy, Policy, and Review Department (Series).

Description: Washington, DC : International Monetary Fund, 2021. | Departmental paper series. | Includes bibliographical references.

Identifiers: ISBN 9781513566603 (paper)

Subjects: LCSH: Developing countries—Economic conditions—Research. | Monetary policy—Developing countries—Research. | Income distribution—Developing countries—Research. | Macroeconomics—Research.

Classification: LCC HC59.7 .M33 2021

Disclaimers and Acknowledgments

The research collaboration was funded by the former United Kingdom’s Department for International Development (UK DFID), which merged with the Foreign and Commonwealth Office (FCO) on September 2, 2020, to become the Foreign, Commonwealth and Development Office (FCDO). The collaboration project continues after the merger, funded by the FCDO.

While this document focuses on the research conducted under this collaboration, many papers and articles cited in this document are not necessarily conducted under this collaboration. See the project website for the list of the outputs under this collaboration.

The authors thank Carine Meyimdjui (SPR) for overall production support, Houda Berrada (COM) and her colleagues for design and editorial work, James Bonner (FCDO) for suggesting the idea to produce this paper, and Noémie Chomet (FCDO) and many other colleagues both at the FCDO and the IMF for their helpful and thoughtful comments during the review process. The authors are also grateful for the helpful guidance from Chris Papageorgiou (RES) and Kangni Kpodar (SPR), the strong support from Antonio Spilimbergo (RES) and Seán Nolan (SPR) on the production of this paper and the work under this research collaboration more generally, and to Andy Berg (ICD) and Cathy Pattillo (AFR) as well as DFID colleagues for having initiated this collaboration. The authors also thank the IMF Executive Director’s office for Africa Group 1 Constituency for the opportunity to present this paper and their insightful feedback. On Chapter 4, Tang is thankful to Stefania Fabrizio (SPR) and Marina Mendes Tavares (RES) for their support.

This research collaboration between the IMF and the former DFID (or now the FCDO) has been jointly managed by RES and SPR, in close collaboration with other IMF Departments.

The Departmental Paper Series presents research by IMF staff on issues of broad regional or cross-country interest. The views expressed in this paper are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, IMF management, or the FCDO.

Publication orders may be placed online, by fax, or through the mail:

International Monetary Fund, Publication Services

P.O. Box 92780, Washington, DC 20090, U.S.A.

Tel. (202) 623-7430 Fax: (202) 623-7201



  • Overview, Impact, and Looking Forward

    • Hites Ahir (RES), Futoshi Narita (RES), and Linda G. Venable (IMF Library)

    • Macroeconomic Research Needs in Low-Income Countries

    • Impact Through Citation, Download, and Social Media

    • Looking Forward: COVID-19 and Beyond

  • 1. Debt-Investment-Growth Nexus

    • Daniel Gurara (AFR), Giovanni Melina (RES), and Luis-Felipe Zanna (ICD)

    • The DIG and DIGNAR Models

    • Model Extensions

    • COVID-19 and Beyond

  • 2. Monetary Policy in Low-Income Countries

    • Hendre Garbers (RES) and D. Filiz Unsal (RES)

    • Monetary Policy Practices in LICs

    • Gauging the Effectiveness and Effects of Monetary Policy in LICs

    • Developing Modern Macroeconomic Models to Look into Monetary Policy Issues in LICs

    • Advancing Model-Based Monetary Policy Analysis and Formulation in LICs

    • Effecting Change Through Country Applications and Uptake

    • Transforming the Engagement of the IMF with LICs

    • An Ongoing Agenda on Monetary Policy in LICs

  • 3. Gender Issues

    • Vivian Malta (SPR)

    • Women and the Macroeconomy

    • Gender Budgeting

  • 4. Income Inequality in Low-Income Countries

    • Xin Tang (SPR)

    • Persistent Income Inequality in LICs

    • Fiscal Reforms

    • Financial Sector Reforms

    • Globalization

    • Key Messages Going Forward

  • 5. Diversification

    • Mattia Coppo (RES) and Giovanni Melina (RES)

    • Diversification and Macroeconomic Performance

    • Diversification Is at the Forefront of the Policy Debate

    • Successful Country Experiences

    • Analytical Work on Diversification at the IMF

  • References

  • Boxes

  • Box 1. Gender Gaps and Informality

  • Box 2. The Quantitative Macroeconomic Approach

  • Box 3. Revenue Mobilization and Inequality in Senegal

  • Box 4. Financial Reforms in Ethiopia and Myanmar

  • Tables

  • Table 1. Selected Pilot Studies of Fiscal Policy Reforms

  • Figures

  • Figure 1. Gap in Economic Policy Analysis

  • Figure 2. Growing Scholarly Citations

  • Figure 3. Country Applications of the DIG and DIGNAR Models in the Stock-Taking Analysis

  • Figure 4. Gender Gaps in Education and Income Level

  • Figure 5. Macroeconomic and Distributional Impacts of Domestic Revenue Mobilization: Case Studies

  • Figure 6. The Effect of Capital Account Liberalization on the Gini Coefficient

  • Figure 7. The Role of Financial Inclusion

  • Box Figure 3.1. Fiscal Reforms in Senegal

  • Box Figure 4.1. The Interaction between Financial Reforms and Fiscal Reforms

Macroeconomic Research in Low-income Countries: Advances Made in Five Key Areas Through a DFID-IMF Collaboration
Author: Hites Ahir, Hendre Garbers, Mattia Coppo, Mr. Giovanni Melina, Mr. Futoshi Narita, Ms. Filiz D Unsal, Vivian Malta, Xin Tang, Daniel Gurara, Luis-Felipe Zanna, Linda G. Venable, Mr. Kangni R Kpodar, and Mr. Chris Papageorgiou