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Mr. Matthieu Bellon
We examine the role of market characteristics and timing in explaining observed heterogeneity in VAT pass-through. We first extend existing theory to characterize the roles of imperfect competition and product differentiation, then investigate these relationships empirically using a panel of 14 Eurozone countries between 1999 and 2013. We find important roles for product market regulation and product quality, and little impact of advance announcement of reforms. Our findings have important implications for policy-makers considering VAT rate adjustments, by illuminating which of the consumers or the producers would experience the brunt of a reform across different settings.
International Monetary Fund

deposited in an account with the central bank. In addition, the authorities increased, in October, fuel prices by 27 percent, which helped to reduce the losses in tax revenue, and paved the way for smooth implementation of the pass through adjustment mechanism. Efforts to normalize the financial relations with foreign creditors were also intensified with the clearance of arrears due notably to development partners. 8. Progress was made in implementing prudent monetary and exchange policies. In this respect, the central bank’s policy rate was raised from 16.75 to 22

Mr. Arto Kovanen

/ region Dependent variable Independent variable Short-term pass-through Adjustment speed Long-term pass-through complete T T-1 T-2 Ghartey (2005) Ghana Treasury bill rate Policy rate (Monthly data) 91 days 0.40 182 days 0.44 1 year 0.62 Sander and Kleimeier (2006) SACU (Monthly data; panel) Retail rates Deposits National discount 0.42 No

Mr. Matthieu Bellon

pass-through adjustments at different times around the reform dates, i.e. at a number of months; before and after the reform date. 20 The coefficients φ it , φ kt and φ ik are country-time, product-time, and country-product fixed effects, and ε ikt is the error term. 21 X ikt denotes country-product-time covariates of interest, specifically product market regulation, quality range, openness to trade, and import concentration. In our main specification we de-seasonalize and de-trend all price indices, weight observations by their consumption share, and

International Monetary Fund
The paper presents a DGE model designed as a core projection tool to support monetary policy in inflation-targeting (IT) emerging market economies. The paper uses a particularly simple and flexible general equilibrium model structure that can be amended to account for various phenomena that often complicate policy analysis in emerging markets, such as persistent trends in relative prices. The model's calibration is intuitive and can draw on the vast experience many countries have with calibrating small 'gap' models of monetary policy transmission. Moreover, the definition of the model's steady state in terms of nominal expenditure ratios, rather than levels of real variables, allows for the easy use of the model in a regular forecast production cycle in an IT central bank. The paper tests the model's properties on recent Turkish data, demonstrating that the main stylized features relevant for monetary policy making are well captured by the model.
International Monetary Fund

-tradable goods evolve in line with the productivity growth differential between the two sectors. With a perfect exchange rate pass-through (adjusted for permanent changes in the tradable productivity trend), the real exchange rate in terms of tradable inflation is constant, while that in terms of the headline inflation is growing at a fraction of the productivity differential in the non-tradable and export sectors (the Balassa-Samuelson effect). Monetary policy determines headline consumer inflation (through its inflation target) and provides the anchor for other nominal

International Monetary Fund
This paper presents Guinea’s 2011 Article IV Consultation and requests for a three-year arrangement under the Extended Credit Facility. The macroeconomic improvement in 2011 has been mainly owed to sharp fiscal adjustment. The deficit on the budget’s basic balance has been reduced from 13 percent of GDP in 2010 to an estimated 2.5 percent of GDP, while monetary financing of the budget has been avoided in an effort to reduce excess liquidity stemming from large central bank advances in 2009–10. Key medium-term challenges are to reduce inflation while preparing the economy for an expected substantial increase in mining activity.