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Sunday, April 06, 2003

IMF World Economic Outlook


The IMF site have a pre-release of the WEO available. The content deals mainly with 'housing bubbles' (see posts below):

To shed light on the relationships between asset price busts and macroeconomic and financial fluctuations, this essay describes the main empirical regularities across industrial countries over the past four decades. The appropriate conduct of monetary policy during an asset price boom will not be addressed, as it was dealt with extensively in a recent World Economic Outlook. The focus on the stylized facts of asset price busts obviates the need to measure or explain "bubbles", which - despite the frequent use of the term - remains highly controversial. While every asset price bust is different and depends on circumstantial factors such as the underlying shocks, the analysis shows that asset price busts and concurrent macroeconomic developments in the postwar period share common patterns that provide a relevant point of reference for assessing the current busts. These patterns are identified using event analysis - that is, on the basis of their timing, which does not imply causality. In particular, the essay will address the
following questions:

How frequent and how big are equity and housing price busts? Do all booms end in busts? Are busts synchronized across countries? What is the link between equity andhousing price boom-bust chronologies and
business cycles?
What macroeconomic and financial developments are associated with asset price busts? Are they always severe? If not, what are the conditions for busts to have serious implications?
How do the most recent busts compare with earlier episodes and what are the implicationsfor the outlook?
Source: IMF World Economic Outlook
LINK

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