International Monetary Fund

When Currencies Drift: Real Exchange Rate Misalignments and Economic Growth

Abstract Persistent deviations of exchange rates from their equilibrium values have long been viewed as a source of macroeconomic instability, yet there remains little consensus on when and under what conditions exchange rate misalignments affect long-term economic growth. This p...

Trade Reform in Services: Structural Change and Production Networks

ABSTRACT We study the effects of services trade reforms in a multi‐country multi‐sector quantitative trade model with input–output linkages. Services matter both as final consumption and as production inputs: cheaper traded services lower household prices directly and reduce the...

Trade in Low‐Carbon Technologies: The Role of Climate and Trade Policies

ABSTRACT Curbing carbon emissions to meet the targets set in the Paris Agreement requires the deployment of low‐carbon technologies (LCTs) at a global scale. This paper assesses the role of climate and trade policies in fostering LCT diffusion through trade. Leveraging a comprehe...

Optimal Taxation of Inflation

This paper analyzes the effectiveness of a tax on inflation policy (TIP), which would require firms to pay a tax proportional to the increase in their prices or wages, in stabilizing inflation. We show that TIP would effectively correct externalities in firms' pricing decisions,...