We explore a global game model of the impact of monetary policy shocks. Risk-neutral asset managers interact with risk-averse households in a market with a risky bond and a ‡oating rate money market fund. Asset managers are averse to coming last in the ranking of short-term performance. This friction injects a coordination element in asset managers’ portfolio choice that leads to large jumps in...

Greater transparency and disclosure of bank activities will not prevent future banking crises unless appropriate monetary, fiscal, and regulatory policies are also adopted. Nonetheless, greater disclosure of banking problems can reduce the costs of banking crises, even if transparency is not a panacea for preventing banking crises. key words: Disclosure, Transparency, Banking Crisis This paper ...

† Earlier versions of this paper were presented at the Second Asian Conference on Corporate Governance (2002), 8th Mitsui Life Symposium on Global Financial Markets (2002), International Monetary Fund (2003), KAEA (Korea America Economic Association) annual meeting (2003), Korea Fair Trade Commission (2002), Korea Association of Industrial Organization (2002), KDI School of Public Policy and Ma...

— We empirically analyze the effect of International Monetary Fund (IMF) involvement on the risk of entering a currency crisis and, respectively, the outcome of such a crisis. Specifically, we investigate whether countries with previous IMF intervention are more likely to experience currency crises. In a second step, we analyze the IMF’s impact on a country’s decision to adjust the exchange rat...

Unemployment is a universal problem with which the political leadership of almost every country has to wrestle. Even the United States of America which has emerged as the dominant economy of the global village, is forced to invest considerable resources in job creation and economic development programmes aimed at reducing institutional unemployment. This matter has become so significant in the ...

— We examine the cyclical properties of development aid using bilateral data for 22 donors and 113 recipients during 1970–2005. We find that bilateral aid flows are on average procyclical with respect to the business cycle in both donor and recipient countries. While aid outlays contract sharply during severe downturns in donor countries, they rise steeply when aid-receiving countries experienc...

The current financial and economic crisis is the worst since the stock-market crash of 1929. As with every complex phenomenon, a mixture of causes have been put forward: the housing-market bubble, risky mortgage loans, ‘toxic’ financial products, high personal and corporate debts, inaccurate credit ratings, and much more. The shockwaves have spread so rapidly and hit so hard that entire banking...

The International Monetary Fund (IMF) has played an important role in restructuring the Korean economy over the past three years. Relying upon survey data collected in 1998 and 1999, this paper explores the role of the IMF in Korea, as perceived by its citizens. In the eyes of the Korean people, the IMF helped their economy to recover from the crisis. However, those Koreans who experience a dec...

Monetary Fund) for valuable input and comments on earlier drafts of this paper.

This Selected Issues paper for Euro Area Policies, was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with officials at EU institutions in the context of the Article IV consultations with countries forming the euro area. It is based on the information available at the time it was completed on July 8, 2004. The views expresse...