Cover
Title Page
Copyright
Dedication
Contents
Acknowledgments
Introduction and Overview
Chapter 1. Budget Constraints and Aggregate Accounts
1.2. A Consistency Accounting Matrix
1.3. Identities and Budget Constraints
1.4. Social Accounting Matrices
1.5. Summary
Chapter 2. Consumption, Saving, and Investment
2.1. Consumption and Saving
2.2. Investment
2.3. Summary
Appendix—Income Uncertainty and Precautionary Saving
Chapter 3. Fiscal Deficits, Public Debt, and the Current Account
3.1. Structure of Public Finances
3.2. The Government Budget Constraint
3.3. Assessing the Stance of Fiscal Policy
3.4. Deficit Rules, Budget Ceilings, and Fiscal Transparency
3.6. Consistency and Sustainability
3.7. Sustainability and Solvency Constraints
3.8. Commodity Price Shocks and Deficits
3.9. Can Fiscal Austerity Be Expansionary?
3.10. Summary
Chapter 4. The Financial System and Monetary Policy
4.1. The Financial System
4.2. Money Demand
4.3. Indirect Instruments of Monetary Policy
4.4. Credit Rationing
4.5. The Transmission of Monetary Policy
4.6. Monetary Policy: Inflation Targeting
4.7. Monetary Policy in a Dollarized Economy
4.8. Summary
Appendix—Inflation Targeting with Forward-Looking Expectations
5.1. The Nature of Exchange Rate Regimes
5.2. Evidence on Exchange Rate Regimes
5.3. Choosing an Exchange Rate Regime
5.4. Trade-offs and Exchange Rate Credibility
5.5. Exchange Rates and the Trade Balance
5.6. Devaluation with Imported Inputs
5.7. Summary
6.1. Sources of Inflation
6.2. Nominal Anchors in Disinflation
6.3. Disinflation: The Role of Credibility
6.4. Two Stabilization Experiments
6.5. Summary
Appendix—Inflation Persistence and Policy Credibility
Chapter 7. Capital Inflows: Causes and Policy Responses
7.1. Capital Flows: Recent Evidence
7.2. How Volatile Are Capital Flows?
7.3. Domestic and External Factors
7.4. Macroeconomic Effects of Capital Inflows
7.5. External Shocks and Capital Flows
7.6. Policy Responses to Capital Inflows
7.7. Summary
Appendix—Measuring the Degree of Capital Mobility
Chapter 8. Financial Crises and Financial Volatility
8.1. Sources of Exchange Rate Crises
8.2. Currency Crises: Three Case Studies
8.3. Banking and Currency Crises
8.4. Predicting Financial Crises
8.5. Financial Volatility: Sources and Effects
8.6. Coping with Financial Volatility
8.7. Summary
Appendix—The Mechanics of Speculative Attacks and Interest Rate Defense
Chapter 9. Policy Tools for Macroeconomic Analysis
9.1. Assessing Business Cycle Regularities
9.2. Financial Programming
9.3. The World Bank RMSM Model
9.4. The Merged Model and RMSM-X
9.5. Three-Gap Models
9.6. The 1-2-3 Model
9.7. Lags and the Adjustment Process
9.8. Summary
Appendix—Money Demand and Cointegration
Chapter 10. Growth, Poverty, and Inequality: Some Basic Facts
10.1. A Long-Run Perspective
10.2. The Power of Compounding
10.3. Some Basic Facts
10.4. Summary
Appendix—Common Measures of Poverty and Inequality
11.1. Basic Structure and Assumptions
11.2. The Dynamics of Capital and Output
11.3. A Digression on Low-Income Traps
11.4. Population, Savings, and Output
11.5. The Speed of Adjustment
11.6. Model Predictions and Empirical Facts
11.7. Summary
Appendix—Dynamics of k, the Output Effect of s, and the Speed of Adjustment
Chapter 12. Knowledge, Human Capital, and Endogenous Growth
12.1. The Accumulation of Knowledge
12.2. Human Capital and Returns to Scale
12.3. Human Capital and Public Policy
12.4. Other Determinants of Growth
12.5. Summary
Appendix—Determinants and Costs of Corruption
13.1. Growth Accounting
13.2. The East Asian “Miracle”
13.3. Growth Regressions and Convergence
13.4. The Empirics of Growth
13.5. The Econometric Evidence: Overview
13.6. Catching Up or Falling Behind?
13.7. Summary
Appendix—Growth Accounting with Increasing Returns
Chapter 14. Trade and Labor Market Reforms
14.1. Trade Liberalization
14.2. Trade and Regional Integration
14.3. Reforming Labor Markets
14.4. Summary
Appendix—Reforming Price Incentives in Agriculture
Chapter 15. Fiscal Adjustment and Financial Sector Reforms
15.1. Fiscal Adjustment
15.2. Pension Reform
15.3. Interest Rate Liberalization
15.4. Sources of Financial Fragility
15.5. Strengthening Financial Systems
15.6. Summary
Appendix—Structural Policy Indices
Chapter 16. Aid, External Debt, and Growth
16.1. The Effects of Foreign Aid
16.2. Growth, Debt, and Fiscal Adjustment
16.3. The Debt Overhang and the Debt Laffer Curve
16.4. Measuring the Debt Burden
16.5. Debt Rescheduling and Debt Relief
16.6. Summary
Appendix—The Theory of Stages in the Balance of Payments
Chapter 17. Sequencing, Gradualism, and the Political Economy of Adjustment
17.1. Stabilization and Structural Adjustment
17.2. The Order of Liberalization
17.4. Political Constraints and Reforms
17.5. Shock Treatment or Gradual Approach?
17.6. Summary
Appendix—Calculating the Welfare Effects of Reform
Referencess
Figure Credits
Index
