This paper explores the effects of fiscal transparency on the borrowing costs of 33 emerging and developing economies (EMs), and on foreign demand for their sovereign debt. Using multiple indicators, including a constructed one based on the published data in the IMF's Government Finance Statistics Yearbook, we measure the separate effects of the three dimensions of fiscal transparency: openness of the budget process, fiscal data transparency, and accountability of fiscal actors. The results suggest that higher fiscal transparency reduces sovereign interest rate spreads and increases foreign holdings of sovereign debt, with each dimension of fiscal transparency playing a different role. Availability of detailed cross-country comparable fiscal data, especially for balance sheet items, has shown to increase foreign investors' willingness in holding EM sovereign debt. JEL Classification Numbers: F30, G15, H60, H83
The Departmental Paper Series presents research by IMF staff on issues of broad regional or crosscountry interest. The views expressed in this paper are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.This paper builds on a research project on macroeconomic policy in low-income countries (IATI Identifier: GB-1-202960) supported by the UK's Foreign, Commonwealth and Development Office (FCDO) and the partners in the IMF's COVID-19 Crisis Capacity Development Initiative (CCCDI)-
We argue that key findings of the empirical literature on the effects of news about future technology—including their tendency to generate negative comovement of macro‐economic aggregates, and their puzzling disinflationary nature—are due to measurement errors in total factor productivity (TFP). In this paper, we estimate the macro‐economic effects of news shocks in the United States using an agnostic identification approach that is robust to measurement errors. We find no evidence of negative comovement conditional on a news shock, and the disinflation puzzle essentially vanishes under our identification strategy. Our results also indicate that news shocks have become an important driver of business‐cycle fluctuations in recent years.
The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
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