International topics
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Domestic versus External Borrowing and Fiscal Policy in Emerging Markets
Domestic public debt issued by emerging markets has risen significantly relative to international debt in recent years. Some recent empirical evidence also suggests that sovereigns have defaulted differentially on debt held by domestic and external creditors. -
April 15, 2007
Renewing the International Monetary Fund: A Review of the Issues
Given the rapid and ongoing integration of the global economy, the International Monetary Fund needs to renew its role, governance structure, and functions if it is to maintain its relevance as the institution charged with promoting global financial stability. Lecavalier and Santor examine the areas of possible reform, including quota, voice, and representation; internal governance; surveillance; lending instruments; finances; and the Fund's role in low-income countries. They also review current Bank of Canada research that supports these reform efforts, including an integrated framework for IMF surveillance recently developed at the Bank. -
Corporate Balance Sheets in Developed Economies: Implications for Investment
In this paper, the authors examine the aggregate national balance-sheets of non-financial corporations in Australia and the G7 countries with a view to assessing both their financial structure and their financial position. More importantly, the authors investigate whether the financial position of non-financial corporations (i.e., debt-to-equity ratio) is material to the economy's investment prospects and whether the importance of this channel differs depending on the structure of corporate financing i.e., bank-based or market-oriented financing structures. -
IMF-Supported Adjustment Programs: Welfare Implications and the Catalytic Effect
The author studies the welfare implications of adjustment programs supported by the International Monetary Fund (IMF). He uses a model where an endogenous borrowing constraint, set up by international lenders who will never lend more than a debt ceiling, forces the borrowing economy to always choose repayment over default. -
World Real Interest Rates: A Global Savings and Investment Perspective
Over the past 15 years, long-term interest rates have declined to levels not seen since the 1970s. This paper explores possible shifts in global savings and investment that have led to this fall in the world real interest rate. -
Exporting and FDI with Endogenous Productivity
This paper provides an analysis of how a firm’s decision to serve a foreign market by exporting or by engaging in foreign direct investment (FDI) affects firm productivity, when productivity is endogeneous as a function of training. The main result of our paper is that, with endogeneous productivity, exporting results in lower productivity than does FDI, but exporting may result in higher or lower employment and output than does FDI. -
Do We Need the IMF to Resolve a Crisis? Lessons from Past Episodes of Debt Restructuring
This study investigate how debt restructurings have evolved over the decades. Debtors and creditors have a long history of engaging an outsider – a “third party”, such as the IMF – to organise and facilitate debt restructurings. -
December 23, 2006
Global Savings, Investment, and World Real Interest Rates
Over the past 25 years, world long-term interest rates have declined to levels not seen since the 1960s. This decline has been accompanied by falling world investment and savings rates. The authors explore global saving and investment outcomes that have led to the fall in the world real interest rate. The results show that the key factors explaining movements in savings and investment are variables that evolve relatively slowly over time, such as labour force growth and the age structure of the world economy. The conclusions suggest that, over the coming years, it is unlikely that these slowly changing variables will be a source of significant changes in world real interest rates. -
December 8, 2006
Perspectives on Productivity and Potential Output Growth: A Summary of the Joint Banque de France/Bank of Canada Workshop, 24–25 April 2006
A nation's productivity is the prime determinant of its real incomes and standard of living, as well as being a major determinant of its potential output. In the short run, deviations of actual output from potential output are a useful indicator of inflationary pressures. This article is a short summary of the proceedings of the workshop, which focus on productivity and potential output growth among industrialized countries. The research is organized under three main themes: estimating potential growth; productivity and growth; and institutions, policies, and growth.