There has been considerable interest in recent years in the question of issue linkages in international negotiations. What is significant about discussions of linkages in the present era is the stress put on making trade-offs explicit among issues. Most of the highly publicized cases of proposed issue linkages appear to have been motivated by attempts of individual countries or groups of countries to extend their dominant bargaining or veto power in one particular issue area into other areas so as to achieve maximum advantage from their whole array of international interactions. The existence of an additional rationale for linkage that relies upon mutual interest has important implications. Drawing on the economic theory of exchange, the use of issue linkages to facilitate the completion of a greater number of mutually beneficial agreements among nations is considered.

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractWe show that the effects of inflation on growth change substantially as the inflation rate rises. Moreover the nonlinearities are quite different for industrial economies than for developing countries. We find that the threshold at which inflation first begins to seriously negatively affect growth is around 8% for industrial economies but 3% or less for developing countries. Marginal growth costs for developing countries then decline significantly above 50% inflation. Failure to account for nonlinearity biases downward the estimated effects of inflation on growth. Mixing industrial and developing economies together also produces unreliable results.

Recent attempts to explain the implementation of conditionality incorporated in IMF-supported programmes have used the concept of ‘ownership’. A literature on ownership has begun to emerge and, alongside this, policy changes in the form of streamlining conditionality and broadening participation in its design have been introduced to encourage ownership. However, ownership is difficult to define precisely and this limits its operational value. This paper focuses instead on implementation and suggests that wider participation will not guarantee better implementation. However, it stresses that political economy variables are important in assessing the chances of implementation and argues that these need to be considered more fully than they are at present when programmes are being negotiated. We suggest a narrow concept of ownership that focuses on prospects for implementation. One implication is that the Fund may have to make concessions on the technical design of programmes in order to maximise the chances that improved policies will be adopted. Comparative Economic Studies (2004) 46, 423–450. doi:10.1057/palgrave.ces.810006

a b s t r a c tChina has been stockpiling international reserves at an extremely rapid pace since the late 1990s and has surpassed Japan to become the largest reserve holder in the world. This paper undertakes an empirical investigation to assess the extent of de facto sterilization and capital mobility using monthly data between mid 2000 and late 2008. We find that China has been able to successfully sterilize a large portion of these reserve increases thus making it a reserve sink such as Germany was under the Bretton Wood system.

Most of the emerging market currency crises are accompanied by sharp reversals or "sudden stops" of capital inflows. We investigated whether some types of capital flows are more likely to reverse than others during these crises. Foreign direct investment is usually considered stable while portfolio investment is frequently depicted as the least reliable type of flow. Recent statistical testing has yielded conflicting results on this issue. We argue that a major problem with recent studies is that the degree of variability of capital flows during normal or inflow periods may give little clue to their behavior during crises and it is the latter that is most important for policy. Using data for 35 emerging economies for 1990 through 2003, we confirm that direct investment is the most stable category, but find that private loans on average are as reversible as portfolio flows.

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