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Martin Iseringhausen, Ms. Mwanza Nkusu, and Wellian Wiranto
This paper studies the determinants of repeated use of Fund-supported programs in a large sample covering virtually all General Resources Account (GRA) arrangements that were approved between 1952 and 2012. Generally, the revolving nature of the IMF’s resources calls for the temporary sup-port of member countries to address balance of payments problems while repeated use has often been viewed as program failure. First, using probit models we show that a small number of country-specific variables such as growth, the current account balance, the international reserves position, and the institutional framework play a significant role in explaining repeated use. Second, we discuss the role of IMF-specific and program-specific variables and find evidence that a country’s track record with the Fund is a good predictor of repeated use. Finally, we conduct an out-of-sample forecasting exer-cise. While our approach has predictive power for repeated use, exact forecasting remains challenging. From a policy perspective, the results could prove useful to assess the risk IMF programs pose to the revolving nature of the Fund’s financial resources.
Mr. Sebastian Acevedo Mejia, Mr. Trevor Serge Coleridge Alleyne, and Rafael Romeu
The Cuban revolution and the subsequent US embargo on Cuba helped shape the tourism sector in the Caribbean, facilitating the birth and growth of alternative destinations. Therefore, the apprehension of the Caribbean tourism industry towards a change in US travel policy to Cuba is understandable, but likely unwarranted. The history of tourism in the region has shown that it is possible for all destinations to grow despite large changes in market shares. Our estimations show that liberalizing US-Cuba tourism could result in US arrivals to Cuba of between 3 and 5.6 million, most of it coming from new tourists to the region. We also identify the destinations most at risk of changes in US-Cuba relations.
Mr. Sebastian Acevedo Mejia
This paper studies the economic costs of hurricanes in the Caribbean by constructing a novel dataset that combines a detailed record of tropical cyclones’ characteristics with reported damages. I estimate the relation between hurricane wind speeds and damages in the Caribbean; finding that the elasticity of damages to GDP ratio with respect to maximum wind speeds is three in the case of landfalls. The data show that hurricane damages are considerably underreported, particularly in the 1950s and 1960s, with average damages potentially being three times as large as the reported average of 1.6 percent of GDP per year. I document and show that hurricanes that do not make landfall also have considerable negative impacts on the Caribbean economies. Finally, I estimate that the average annual hurricane damages in the Caribbean will increase between 22 and 77 percent by the year 2100, in a global warming scenario of high CO2 concentrations and high global temperatures.
International Monetary Fund. Western Hemisphere Dept.
This 2016 Article IV Consultation highlights that economic growth in The Bahamas is estimated to have stalled in 2015, as a modest increase in air tourism arrivals was not sufficient to offset a contraction in domestic demand and weak exports of goods. Private consumption and investment were weighed down by headwinds from fiscal consolidation, as well as an end to construction. Inflation was moderate at 1.9 percent on average in 2015. Growth is expected to strengthen to about 0.5 percent in 2016, supported by continued growth in air tourist arrivals and moderating headwinds to private consumption and investment.
Mr. Sebastian Acevedo Mejia, Lu Han, Miss Marie S Kim, and Ms. Nicole Laframboise
This paper studies the role of airlift supply on the tourism sector in the Caribbean. The paper examines the relative importance of U.S.-Caribbean airlift supply factors such as the number of flights, seats, airlines, and departure cities on U.S. tourist arrivals. The possible endogeneity problem between airlift supply and tourist arrivals is addressed by using a structural panel VAR and individual country VARs. Among the four airlift supply measures, increasing the number of flights is found to be the most effective way to boost tourist arrivals on a sustained basis. As a case study, the possible crowding effect of increasing the number of U.S. flights to Cuba is investigated and, based on past observations, we find no significant impact on flights to other Caribbean countries. The impact of natural disasters on airlift supply and tourist arrivals is also quantified.
International Monetary Fund. External Relations Dept.
Finances & Développement, septembre 2015
International Monetary Fund. External Relations Dept.
Finanzas y Desarrollo, septiembre de 2015
International Monetary Fund. External Relations Dept.
This chapter presents the point of view and ideas of Sabina Alkire, an economist. Alkire wants the Multidimensional Poverty Index to be part of a data revolution to guide the fight against poverty. According to Alkire, learning to meditate soothed away what she describes as the temper tantrums of her childhood. The chapter also highlights the fact that an index is only as good as its underlying data, and in emerging market economies that quality is often inadequate. The quest for better poverty metrics coincides with growing doubts about the ability of conventional statistics, especially GDP, to gauge economic growth in the digital economy, let alone well-being, welfare, and environmental sustainability.
International Monetary Fund
This consultation paper explains that in addition to the adverse impact of the global slowdown and higher commodity prices, St. Vincent and the Grenadines has been hit by two successive natural disasters in the last 12 months. As a result, real GDP has been contracted by a cumulative 4.7 percent since 2007 and is expected to remain slightly negative this year. Growth is expected to improve gradually toward its potential, but significant downside risks remain, largely related to developments in the global economy.