— Many developing and transitioning countries have difficulty sticking to sound macroeconomic policy. International donors are pushing recipient countries to forge a public consensus on macroeconomic policy as a means to enhance sustainability and impacts on the poor. Finance and budget officials, central bank staff, and economic policymakers, however, often assume that citizens cannot understa...

Some Thoughts on Macroeconomic Fluctuations and the Timing of Labor Market Reform In this paper, I analyze the pros and cons of implementing structural reforms of the labor market in booms vs. recessions, in light of considerations of social efficiency, political viability, and macroeconomic fine tuning. While the optimal timing of a reform depends on the relative importance of several conflict...

We show that the existence of momentum and contrarian profits imposes restrictions on stochastic discount factors used to price stocks in equity markets. For several widely used asset pricing models, we demonstrate that these restrictions imply testable forms of intertemporal dependence in macroeconomic fundamentals such as consumption growth rate. Extensive empirical analysis provides supporti...

Sovereign risk premia have risen sharply in several European countries, contributed to increased credit spreads in the private sector. If monetary policy cannot offset these credit spreads because it is constrained by the zero lower bound, sovereign risk threatens macroeconomic stability: private-sector beliefs of a weakening economy may become self-fulfilling. In this paper, we put forward a t...

Policies designed to pursue an equity-led macroeconomic growth strategy must take into account feedback effects, with distribution itself influencing macroeconomic outcomes. Under the right conditions, a more equitable distribution of income and opportunities in the form of human development can be a stimulus to growth, funding further investments in human development. Developing the policies t...

This paper investigates the relationship between macroeconomic instability and private investment of the Iranian economy. The study uses a trivariate VAR(2)-GARCH(1,1)-in-Mean with diagonal BEKK approach to proxied inflation and exchange rate uncertainties as the main indicators of macroeconomic instability. Moreover, Bounds testing approach to level relationship applied to investigate the long...

This study aims to analyze: 1) the development of demand for craft SMIs products through the use of e-commerce, 2) the effect of e-commerce utilization, macroeconomic conditions, prices, and the intensity of promotion on product demand, 3) the effect of e-commerce utilization, macroeconomic conditions, prices, promotion intensity, and product demand for performance; and 4) the role of product d...

Currency crises tend to affect countries in geographic proximity. This suggests that regional patterns of international trade are important in understanding how currency crises spread, above and beyond any macroeconomic phenomena. Using data for five different currency crises (in 1971, 1973, 1992, 1994, and 1997) we show that currency crises affect countries tied together by international trade...

Executive Summary Currency crises tend to be regional. Since macroeconomic and financial phenomena are not regional, these phenomena are unimportant in understanding why crises spread. But international trade is regional, as countries tend to trade with their neighbors. This suggests that trade links are important in understanding how currency crises spread, above and beyond any macroeconomic p...