Bogdan Lissovolik

Competitiveness in the Southern Euro Area: France, Greece, Italy, Portugal, and Spain

This collection of studies analyzes developments in nonprice external competitiveness of France, Greece, Italy, Portugal, and Spain. While France, Italy, and Portugal have experienced substantial export market share losses, Greece and Spain performed relatively well. Export market share losses appear associated with rigidities in resource allocation (sectoral, geographical, technological) relative to peers and lower productivity gains in high value-added sectors. Disaggregated analysis of goods and services export markets provides insights on aspects such as quality, market concentration, growth of destination markets, and geographical and sectoral diversification. Also, increased import penetration, offshoring and FDI could improve productivity and export performance.

Determinants of Inflation in a Transition Economy: The Case of Ukraine

This paper examines determinants of inflation in Ukraine during 1993-2002 in a cointegrating framework. Two basic theoretical models--a markup and a money market model--are tested. While broad money is cointegrated with the CPI for the whole sample and for early subsamples, the cointegration ceases to be statistically significant between 1996-2002, in part because of strong remonetization. The mark-up model offers a more consistent and well-fitting overall framework for 1996-2002 data, pointing inter alia to a greater role of administered prices in the CPI within a fairly mainstream inflation process. The long-term monetary transmission mechanism operates through the exchange rate and wages, but broad money clearly enters short-term inflation determinants. Prudent macroeconomic policies, grain harvests, and administrative decisions explain the sharp decline of inflation over 2000-2002.

An Interim Assessment of Ukrainian Output Developments, 2000-01

After a long period of steep decline which followed the breakup of the Soviet Union, Ukraines economy rebounded in 2000, and the recovery accelerated in 2001. The paper examines the timing and the nature of the recovery from a number of different perspectives such as the presence of idle but productive capital, the stance of domestic policies, real wage developments, learning, and foreign factors. The final chapter presents tentative conclusions, which point to an eclectic explanation involving a range of factors rather then any single major cause of the recovery, as well as an agenda for further research.

Fiscal Policy in Latin America : Lessons and Legacies of the Global Financial Crisis

Latin America’s bold fiscal policy reaction to the global financial crisis was hailed as a sign that the region had finally overcome its procyclical fiscal past. However, most countries of the region have not yet rebuilt their fiscal space, despite buoyant commodity revenues and relatively strong growth in the aftermath of the crisis. Using the experience of Brazil, Chile, Colombia, Mexico, Peru, and Uruguay, this paper examines the lessons and legacies of the crisis by addressing the following questions, among others: How much did the 2009 fiscal stimulus help growth? What shortcomings were revealed in the fiscal policy frameworks? What institutional reforms are now needed to provide enduring anchors for fiscal policy? How much rebuilding of buffers is needed going forward?

Migration and Remittances in Latin America and the Caribbean; Engines of Growth and Macroeconomic Stabilizers?

Outward migration has been an important phenomenon for countries in Latin American and the Caribbean (LAC), particularly those in Central America and the Caribbean. This paper examines recent trends in outward migration from and remittances to LAC, as well as their costs and benefits. For the home country, the negative impact from emigration on labor resources and productivity seems to outweigh growth gains from remittances, notably for the Caribbean. However, given emigration, remittance flows play key financing and stabilizing roles in Central America and the Caribbean. They facilitate private consumption smoothing, support financial sector stability and fiscal revenues, and help reduce poverty and inequality, without strong evidence for harmful competitiveness effects through shifts in the real exchange rate.

Growing Pains; Is Latin America Prepared for Population Aging?

This paper estimates the fiscal costs of population aging in Latin America and provides policy recommendations on reforms needed to make these costs manageable. Although Latin American societies are still younger than most advanced economies, like other emerging markets the region is already in a process of population aging that is expected to accelerate in the remainder of the century. This will directly affect fiscal sustainability by putting pressure on public pension and health care systems in the region that are already more burdened than, for example, in emerging Asia, a region with a similar demographic structure. A stylized cross-country exercise, drawing on demographic projections from the United Nations and methodologies developed by the IMF to derive public spending projections, is used to quantify long-term fiscal gaps generated by population aging in 18 Latin American countries. Several aspects of current pensions and health care systems in Latin Amer-ica make the region’s long-term fiscal positions particularly vulnerable to population aging.