E-government Fundamentals

Optimal IMF Policy with Private Capital Flows

This paper characterizes optimal IMF policy in an environment with moral hazard followed by adverse selection. In our framework, government actions to improve domestic productivity are not always e¤ective, and the government learns of the success of its actions before foreign investors. Without the IMF, it is not possible for foreign investors to discern the quality of the domestic production s...

Policy with Dispersed Information

Information regarding aggregate economic fundamentals is widely dispersed in society, is only imperfectly aggregated through prices or other indicators of aggregate activity, and can not be centralized by the government or any other institution. In this paper we seek to identify policies that can improve the decentralized use of such dispersed information without requiring the government to obs...

How Accurate are Government Forecasts of Economic Fundamentals? The Case of Taiwan

Long-run and short-run determinants of sovereign bond yields in advanced economies

We analyze determinants of sovereign bond yields in 22 advanced economies over the 1980–2010 period using panel cointegration techniques. The application of the cointegration methodology allows distinguishing between long-run (debt-to-GDP ratio, potential growth) and short-run (inflation, short-term interest rates, etc.) determinants of sovereign borrowing costs. We find that in the long run, g...

Government Debt and Banking Fragility: The Spreading of Strategic Uncertainty

This paper studies the interaction of government debt and interbank markets. Both markets are known to be fragile: excessively responsive to fundamentals and prone to strategic uncertainty. The goal is to understand the channels that link these markets and to evaluate policy measures for their stability.