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    <title>EconStor Community: UC Santa Cruz, Santa Cruz Institute for International Economics (SCIIE)</title>
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      <title>International reserves and fiscal policy in developing countries</title>
      <link>http://hdl.handle.net/10419/64123</link>
      <description>Title: International reserves and fiscal policy in developing countries
&lt;br/&gt;
&lt;br/&gt;Authors: Zhou, Yan
&lt;br/&gt;
&lt;br/&gt;Abstract: This paper investigates empirically the relationship between the pattern of fiscal policy and the demand for international reserves in developing countries, and how this relationship is associated with political risk and conditional access to global capital markets. It finds evidence that for developing countries with low political risk, countercyclical (procyclical) fiscal policies are associated with higher (lower) international reserve holdings in economic downturns. The relationship is stronger when the countries with low political risk rely heavily on external financing. For developing countries with high political risk, the link between reserves holdings and fiscal policy pattern is not clear-cut.</description>
      <pubDate>Sun, 29 Oct 2006 22:58:59 GMT</pubDate>
    </item>
    <item>
      <title>Examining US productivity: Knowledge flows from industry and country sources</title>
      <link>http://hdl.handle.net/10419/64122</link>
      <description>Title: Examining US productivity: Knowledge flows from industry and country sources
&lt;br/&gt;
&lt;br/&gt;Authors: Koch, William
&lt;br/&gt;
&lt;br/&gt;Abstract: This paper examines Total Factor Productivity (TFP) and knowledge flows, using international patent data. The result is a measure of technology that isolates sources of innovation and their contributions to domestic TFP. Within-industry innovation enhances domestic productivity, and domestic between industry innovations are productivity enhancing. However, foreign-sourced between-industry innovation has a negative effect on domestic productivity. This highlights the dual aspect of patents as a measure of innovation. However, when controlling for domestic market structure, foreign-owned firm employment, or imports, foreign-sourced knowledge flows have potentially positive effects on domestic TFP. Overall results are sensitive to sectors and country of origin.</description>
      <pubDate>Mon, 29 Oct 2007 22:58:59 GMT</pubDate>
    </item>
    <item>
      <title>The persistence and determinants of current account balances: The implications for global rebalancing</title>
      <link>http://hdl.handle.net/10419/64121</link>
      <description>Title: The persistence and determinants of current account balances: The implications for global rebalancing
&lt;br/&gt;
&lt;br/&gt;Authors: Clower, Erica; Ito, Hiro
&lt;br/&gt;
&lt;br/&gt;Abstract: This paper examines the dynamics of current account balances with particular focus on the statistical nature of the persistency of current account balances and its determinants. With the assumption that stationary current account series ensures the long-run budget constraint while countries may experience local nonstationarity in current account balances, we examine the dynamics of current account balances across a panel of 70 countries. While linear unit root tests fail to reject the null hypothesis of a unit root for a number of countries, a Markov-switching (MS)-ADF econometric framework that allows for regime switches in current account dynamics not only lead us to reject the unit root null hypothesis for a much increased number of countries, but also provide notable cross country differences in the timing and duration of stationary and locally nonstationary regimes. Armed with the structural break dates the MS-ADF testing provides, we investigate the determinants of the different degrees of current account persistence. We find that the lack of trade openness, net foreign assets, and financial development help increase the degree of current account persistence. The type of exchange rate regimes is not found to be a robust determinant of current account persistence, but fixed exchange rate regime is more likely to lead an emerging market country to enter nonstationary current account regime.</description>
      <pubDate>Fri, 29 Oct 2010 22:58:59 GMT</pubDate>
    </item>
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      <title>Signaling credibility - choosing optimal debt and international reserves</title>
      <link>http://hdl.handle.net/10419/64119</link>
      <description>Title: Signaling credibility - choosing optimal debt and international reserves
&lt;br/&gt;
&lt;br/&gt;Authors: Aizenman, Joshua; Fernández-Ruiz, Jorge
&lt;br/&gt;
&lt;br/&gt;Abstract: This paper evaluates the challenges facing developing countries when there is uncertainty about the policy maker type. We consider a country characterized by volatile output, inelastic demand for fiscal outlays, high tax collection costs, and sovereign risk, where future output depends on the type of policymaker in place today. There are two policymakers - type T chooses debt and international reserves to smooth tax collection costs; type S has higher discount factor, aiming at obtaining current resources for narrow interest groups, and preferring not to undertake costly reforms that may enhance future output. Financial markets do not know the type of policymaker in place and try to infer its type by looking at its financial choices. We show that various adverse shocks (lower output, higher real interest rate, etc.) can induce a switch from an equilibrium where each policy maker chooses its preferred policy to another where T distorts its policies in order to separate itself from S in the least costly way. This is accomplished by type T reducing both international reserves and external debt. Further decline in output would induce type T to lower debt, and reserves would fall at a higher rate than otherwise expected.</description>
      <pubDate>Sat, 29 Oct 2005 22:58:59 GMT</pubDate>
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