This paper reviews the analysis of fiscal policy in the new open economy macroeconomics literature, in view of increasing interest in the question of transmission and coordination of policies across countries, stirred by developments in this literature and by the formation of the euro area. The analysis focuses on two main points: (i) the identification of welfare spillover effects to third cou...

In this work, extension theorems are generalized to self-dual codes over rings and as applications many new binary self-dual extremal codes are found from self-dual codes over F2m + uF2m for m = 1, 2. The duality and distance preserving Gray maps from F4 + uF4 to (F2 + uF2) and F42 are used to obtain self-dual codes whose binary Gray images are [64, 32, 12]-extremal self-dual. An F2 + uF2-exten...

This paper investigates whether the degree and the nature of economic and monetary policy interdependence between the United States and the euro area have changed with the advent of EMU. Using real-time data, it addresses this issue from the perspective of financial markets by analysing the effects of monetary policy announcements and macroeconomic news on daily interest rates in the United Sta...

This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. A reduced-form model approach was used to estimate the trade ...

This paper provides a synthesis and further development of a global modelling approach introduced in Pesaran, Schuermann and Weiner (2004), where country specific models in the form of VARX* structures are estimated relating a vector of domestic variables, xit, to their foreign counterparts, x*it, and then consistently combined to form a Global VAR (GVAR). It is shown that the VARX* models can ...

The rise of China as an economic powerhouse has caused concerns in its neighbors. Prevailing in the region is the fear that China is becoming a gigantic ‘‘regional factory’’ that will ‘‘hollow out’’ neighboring economies’ industries. In this paper, we emphasize the economic benefits that a rising Chinese economy can bring into the region. A discussion on the country’s growth strategy suggests t...

Can financial integration, particularly the cross-border investments of multinational firms, help explain the synchronization of business cycles? This paper presents evidence on the comovement of returns and investment within U.S. multinational firms to address this question. These firms constitute significant fractions of economic output and investment in most large economies, suggesting that ...

In an open economy, can unilateral environmental policies undertaken by a group of committed countries ensure sustainable growth? This paper addresses this question in a dynamic model with directed technical change. There are two countries and two tradeable goods. One of the two goods (the polluting good) is produced with a clean input and a dirty input, which causes a global externality. Innov...

This paper is concerned with the estimation of New Keynesian Phillips Curves (NKPC) and focusses on two issues: the weak instrument problem and the characterisation of the steady states. It proposes some solutions from a global perspective. Using a global vector autoregressive model (GVAR) steady states are estimated as long-horizon expectations and valid instruments are constructed from the gl...

This paper investigates Japanese banks' earnings management behavior under three distinct economic environments: (1) highgrowth with asset price bubble economy (1985–1990); (2) stagnant growth with financial distress economy (1991–1996); and (3) severe recession with credit crunch economy (1997–1999). Using bank balance sheet information of 78 Japanese banks, we find that earnings management be...