DISCLAIMER: Staff Discussion Notes (SDNs) showcase policy-related analysis and research being developed by IMF staff members and are published to elicit comments and to encourage debate. The views expressed in Staff Discussion Notes are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

This paper analyzes market reactions to the 2013-14 Fed announcements relating to tapering of asset purchases and their relationship to macroeconomic fundamentals and country economic and financial structures. The study uses daily data on exchange rates, government bond yields, and stock prices for 21 emerging markets. It finds evidence of markets differentiating across countries around volatile episodes. Countries with stronger macroeconomic fundamentals, deeper financial markets, and a tighter macroprudential policy stance in the run-up to the tapering announcements experienced smaller currency depreciations and smaller increases in government bond yields. At the same time, there was less differentiation in the behavior of stock prices based on fundamentals.

Despite the absence of pulmonary symptoms in four individuals, all patients had parenchymal abnormalities. Small pulmonary nodules were the most common finding, identified in nine patients. These nodules ranged in size from 2 to 5 mm in five patients, with larger nodules ranging up to 15 mm seen in four patients. In one patient, the only parenchymal abnormality was a single 5-mm focus of ground-glass attenuation. No relationship was seen between either the presence of pulmonary symptoms or the presence of peripheral eosinophilia and the severity of parenchymal disease. No additional significant findings were identified.

The topic of CEO compensation has been highly debatable. The financial crisis of 2008 further prompted public and media to question executive compensation practices in the United States. This study investigates the effect of the financial crisis on CEO compensation and also examines various determinants of CEO compensation. Using a sample of Fortune 500 firms and 2241 observations, we find that financial crisis has a small but significant effect on CEO compensation. Firm performance, firm size, and CEO duality were found to have a significant effect on CEO compensation both pre and post-crisis. One major difference found between pre and post-crisis was in the composition of pay. While cash compensation decreased significantly post-crisis, equity-compensation increased.

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<p>En este escrito se usa una nueva medida del desarrollo financiero para mostrar que la mayoría de los mercados emergentes aún puede obtener beneficios de crecimiento y estabilidad con un mayor desarrollo financiero. Primero define el desarrollo financiero como una combinación de profundidad, acceso y eficiencia. Luego muestra que el crecimiento económico se debilita a mayores niveles de desarrollo financiero y que el ritmo del desarrollo financiero es importante; además propone una nueva manera de ver los “tradeoffs” de la regulación financiera. Concluye que no hay una secuencia única en el desarrollo de las instituciones y los mercados financieros, aunque se observa cuando las economías se desarrollan los beneficios relativos de las instituciones disminuyen y los de los mercados aumentan.</p>

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This paper explores the causes and consequences of fiscal dominance over monetary policy in Sub-Saharan Africa (SSA). Fiscal dominance has always been a pressing problem as it can contribute to inflation and macroeconomic instability, and increasingly so as fiscal deficits and public debt are rising in many SSA countries. We find that legal limits and availability of alternative financing options play an important role in determining the extent to which government deficits tend to be financed by the central bank. We also find economically significant effects of central bank lending to government on the exchange rate and inflation.