Ideas to Action:

Independent research for global prosperity



February 28, 2017

Expanding Global Liquidity Insurance: Myths and Realities of the IMF’s Precautionary Credit Lines - Working Paper 449

This paper addresses four misconceptions (or ‘myths’) that have likely played a role in the limited utilization of the IMF’s two precautionary credit lines, the Flexible Credit Line (FCL) and the Precautionary and Liquidity Line (PLL). These myths are 1) too stringent qualification criteria that limit country eligibility; 2) insufficient IMF resources; 3) high costs of precautionary borrowing; and 4) the economic stigma associated with IMF assistance. We show, in fact, that the pool of eligible member states is likely to be seven to eight times larger than the number of current users; that with the 2016 quota reform IMF resources are more than adequate to support a larger precautionary portfolio; that the two IMF credit lines are among the least costly and most advantageous instruments for liquidity support countries have; and that there is no evidence of negative market developments for countries now participating in the precautionary lines.

February 6, 2017

Making Global Trade More Gender-Inclusive

The benefits of global trade are numerous and well-documented, but trade channels can still be made more inclusive for women entrepreneurs and wage workers. Incorporating pre-ratification conditions into the trade agreement negotiation process to remove legal barriers against women’s equal participation in the economy (and therefore equal advantages from trade), as well as instituting follow-up enforcement mechanisms, can help to ensure trade benefits women and men more equally going forward.

February 3, 2017

Trade Misinvoicing in Developing Countries

This paper discusses selected issues in the analysis of trade misinvoicing. It starts by examining various motives for the misdeclaration of trade activities. It is argued that the broad range of incentives to fake customs declarations provides an important challenge for the empirical assessment of the extent of trade misinvoicing. After analyzing the costs and benefits of different empirical approaches to quantifying trade misinvoicing, the accuracy and reliability of estimation results reported in the literature are reviewed. It is shown that quantitative findings are heavily dependent on the underlying assumptions in the empirical analysis, making estimation results on trade misinvoicing practices largely a matter a faith.