Imf Staff Papers Volume 49 No 2

This paper explores sources of the output collapse in Russia during transition. A modified growth-accounting framework is developed that takes into account changes in factor utilization that are typical of the transition process. The results indicate that declines in factor inputs and productivity were both important determinants of the output fall. The paper analyzes the behavior of real commodity prices over the 1862–1999 progress. It also examines whether average stocks of health and education are converging across countries, and calculates the speed of their convergence using data from 84 countries for 1970–90.

This paper empirically investigates the monetary impact of banking crises in Chile, Colombia, Denmark, Japan, Kenya, Malaysia, and Uruguay during 1975–98. Cointegration analysis and error correction modeling are used to research two issues: (i) whether money demand stability is threatened by banking crises; and (ii) whether crises lead to structural breaks in the relation between monetary indicators and prices. Overall, no systematic evidence that banking crises cause money demand instability is found. The paper also analyzes inflation targeting in the context of the IMF-supported adjustment programs.

This paper presents details of a symposium on forecasting performance I organized under the auspices of the IMF Staff Papers. The assumption that the forecaster's goal is to do as well as possible in predicting the actual outcome is sometimes questionable. ln the context of private sector forecasts, this is because the incentives for forecasters may induce them to herd rather than to reveal their true forecasts. Public sector forecasts may also be distorted, although for different reasons. Forecasts associated with IMF programs, for example, are often the result of negotiations between the IMF staff and the country authorities and are perhaps more accurately viewed as goals, or targets, rather than pure forecasts. The standard theory of time series forecasting involves a variety of components including the choice of an information set, the choice of a cost function, and the evaluation of forecasts in terms of the average costs of the forecast errors. It is generally acknowledged that by including more relevant information in the information set, one should be able to produce better forecasts.

This paper empirically investigates the monetary impact of banking crises in Chile, Colombia, Denmark, Japan, Kenya, Malaysia, and Uruguay during 1975–98. Cointegration analysis and error correction modeling are used to research two issues: (i) whether money demand stability is threatened by banking crises; and (ii) whether crises lead to structural breaks in the relation between monetary indicators and prices. Overall, no systematic evidence that banking crises cause money demand instability is found. The paper also analyzes inflation targeting in the context of the IMF-supported adjustment programs.

Annotation This paper explores sources of the output collapse in Russia during transition. a modified growthaccounting framework is developed that takes into account changes in factor utilization that are typical of the transition process. the results indicate that declines in factor inputs and productivity were both important determinants of the output fall. the contribution of the productivity drop was critical, but significantly smaller than previously reported.

From the Foreword to the first issue: “Among the responsibilities of the International Monetary Fund, as set forth in the Articles of Agreement, is the obligation to fact as a center for the collection and exchange of information on monetary and financial problems,’ and thereby to facilitate ‘the preparation of studies designed to assist members in developing policies which further the purposes of the Fund.’ The publications of the Fund are one way in which this responsibility is discharged. “Through the publication of Staff Papers, the Fund is making available some of the work of members of its staff. The Fund believes that these papers will be found helpful by government officials, by professional economists, and by others concerned with monetary and financial problems. Much of what is now presented is quite provisional. On some international monetary problems, final and definitive views are scarcely to be expected in the near future, and several alternative, or even conflicting, approaches may profitably be explored. The views presented in these papers are not, therefore, to be interpreted as necessarily indicating the position of the Executive Board or of the officials of the Fund.”

WILLIAM. white, who joined the International Monetary Fund in 1948, spent his entire professional life in the Research Department. Present and past staff members, many of whom benefited from his advice, have asked that his contribution-to the work of the Fund should receive recognition in Staff Papers. This appreciation draws on excerpts from written recollections of some of his colleagues.

This second issue for 2004 contains 8 new papers, including notable contributions from: Nancy Brune, Geoffrey Garrett, and Bruce Kogut on the global spread of privatization; and Mark P. Taylor and Elena T. Branson on asymmetric arbitrage and default premiums in the U.S. and Russian markets. Other papers in the issue look at German wage structures, contagion in equity markets, export orientation and productivity in Sub-Saharan Africa, the role of higher vs. basic education in economic development, and issues related to capital account liberalization.