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- During the 1980s, following the Mexican payments crisis of August 1982, a number of debt "plans" and "strategies" have been introduced, but overall progress in resolving the situation has been slow. This paper results from a project to investigate the relationship between macroeconomic developments in OECD countries and those in debtor countries. The aim is to develop tools that can help to throw light on the importance of international linkages, including those between OECD and debtor countries, in order to understand better why many of the hopes and expectations of the various debt plans have not been realised.
- This paper presents a set of models for Latin America (DEMOD) that can be used to analyze the impact of the world macroeconomy on the economies of Latin America; these have been designed to focus in particular on growth and debt servicing capacity and to trace the development of creditworthiness indicators. In addition, debt accounting models for the highly indebted ...
Europe has been beset by an interrelated banking crisis and sovereign debt crisis. Bond spreads faced by Greece and Ireland, and to a lesser extent Portugal followed by Spain, have increased. This paper explores these issues from the perspective of financial markets, focusing mainly on the four countries in the frontline of these pressures: Greece and Portugal, on the one hand, where the problems are primarily fiscal in nature; and Ireland and Spain, on the other, where banking problems related to the property boom and bust have been the key moving part. The paper first examines the probabilities of default implicit in observable market spreads and considers these calculations against sovereign debt dynamics. It then explores the implications of the interaction between bank losses and fiscal deficits on the one hand, and the feedback that any debt haircuts anticipated by markets could have on bank solvency. The study finds that market-implied sovereign default probabilities do in fact discriminate quite clearly between countries based on five criteria that affect the probability of debt restructuring. The discussion highlights some implications for banking system balance sheets of expected losses and shows the potential impact on them of sovereign restructuring implicit in market analysis. While the paper does not make any recommendations for policy action, it does explore a range of policy options and the implications each might have for the financial markets. JEL Classification: G01, G12, G15, G18, G21, H06, H60, H62, H63, H68 Keywords: financial crisis, sovereign risks, public deficits and debt, bond markets, banks.
The Kyoto Protocol covers emissions of a range of greenhouse gases. Yet, most attempts to quantify the economic impact of implementing the Protocol’s emission targets for the period 2008-12 have focused exclusively on CO2 emissions. This paper extends previous OECD analysis confined to CO2 alone so as to cover also emissions of methane and nitrous oxide. The paper concludes that the economic costs of implementing the targets in the Kyoto Protocol are lower than suggested by an analysis confined to CO2 alone. However, over the longer term, when larger cuts in greenhouse gas emissions are required in order to have any material effect on climate, most abatement will likely have to come from CO2 and the inclusion of other gases in the analysis may not substantially alter estimates of economic costs ...
This technical paper presents the complete technical specification of the current version of the RE-GEM (Regional and Environmental General Equilibrium Model) for India. The document lists all the key structural and behavioural equations, providing a justification for the chosen model specification. In addition, a complete description is provided of the estimation methods and the sources of the Indian data used in the model; an aggregated version of the Indian regional Social Accounting Matrix we constructed is appended to this document. The object is to inform in the most detailed way possible researchers interested in building on the OECD’s modelling effort, and to provide a useful tool for informing the debate on the economics of environmental policy in developing countries ...
JEL Classification: E32; C22
Keywords: Hodrick-Prescott band-pass filter; Composite leading indicators.© beawolf - Fotolia.com
A reoccurring motif in pension literature and policy is the search for “benefit security” – that is, assurance to members of a pension regime that, at the end of the working career, they will get some reasonably predictable outcome, either as a pension (benefit stream) or a lump sum. The purpose of this note is to present a simple “thought experiment” to explore this matter and how market mechanisms might be brought more to bear...
This paper discusses two variants of the accessibility paradigm for transport planning. The extensive paradigm aims to radically overhaul transport planning to incorporate issues of environmental quality, urban sprawl, safety and health. Its adoption is unlikely in the medium term and raises questions about the role of the transport planner. The limited paradigm calls for transport planning to adopt accessibility indicators in place of mobility indicators. However this will not meet the underlying goals of the accessibility critique. A change in the focus of transport planning is needed from the functioning of transport networks to the service that differently placed people receive from the transport system.
This paper reviews the accuracy of OECD projections over the 1982-1987 period. It is shown that, although the evolution of the economic climate was correctly projected, projection errors for economic activity and inflation varied significantly both through the period under consideration and between countries. But the average absolute error in GNP over the entire 1982/87 period was less than 1 percentage point. The biggest errors were made in the first half of the period and were more important for the smaller countries. An attempt is made to assess the likely impact of differences between assumed and realised economic policies, energy prices and exchange rates on the size and direction of the projection errors ...