Institutional research & analysis

Source: IMF

INSTITUTIONAL

ReportJune 23, 2026

Reserve Adequacy in Georgia: How Much is Enough?

This paper extends the Jeanne-Ranciѐre (2011) framework to assess Georgia’s optimal level of international reserves by incorporating three additional channels particularly relevant to its economy: (i) sovereign risk and borrowing costs; (ii) private-sector dollarization; and (iii) foreign exchange volatility associated with market shallowness, building on Chen and others (2023). This integrated framework provides a more comprehensive measure of reserve adequacy than the baseline approach for ...

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ReportJune 23, 2026

Labor Market Implications of Skill Mismatches and Non-Labor Income in Georgia

Unemployment in Georgia remains structurally high, reflecting persistent skill mismatches and weak work incentives amid low wages and widespread reliance on remittances and social transfers. This paper finds that over‑education remains pervasive due to limited availability of productive jobs, alongside shortages in technical and job‑relevant skills stemming from weak links between education and labor demand. Remittances and social transfers are estimated to reduce aggregate employment by abou...

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ReportJune 22, 2026

Unleashing Potential: Structural Reforms for Boosting Long-Term Growth

This paper assesses North Macedonia’s long-term growth prospects and the potential output gains from structural reforms. Potential growth is estimated at 2.6–2.9 percent in 2025 using univariate filters and semi-structural models estimated with a Kalman filter, with results pointing to a small positive output gap. Benchmarking against EU and U.S. frontiers highlights sizable gaps in labor market outcomes, the business environment, and governance. Simulations suggest that closing half of the g...

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ReportJune 22, 2026

Tax Potential in North Macedonia

This paper assesses North Macedonia’s tax potential and reform options to support fiscal consolidation and create space for rising long-term spending pressures. Tax revenue remains the lowest in the region, reflecting low statutory rates, extensive tax expenditures, weak tax efficiency, and a sizable informal economy. Using a stochastic frontier model for 154 countries, the paper estimates tax potential at about 21 percent of GDP, implying a tax gap of around 3½ percent of GDP. Closing this g...

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Working PaperJune 19, 2026

The (Many) Consequences of the Housing Affordability Problem in the EU: A Machine-Learning Empirical Analysis

Housing affordability is high on the economic, social, and political agenda in Europe. While the economic literature has mostly analyzed the drivers of housing unaffordability, this paper focuses on its consequences, quantifying, at the EU level, its impact on individuals’ well-being as well as its economic and demographic impact. We find that the impact of an increase in housing cost burden is large on housing adequacy as well as on poverty and health. It is somewhat smaller on fertility and...

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Working PaperJune 19, 2026

Long-term Effects of US Tariff Increases on CAPDR

In a series of declarations throughout 2025 and into 2026, the United States announced higher tariffs on nearly all imports from most countries. The countries that make up the CAPDR region (Costa Rica, Dominican Republic, Guatemala, Honduras, Nicaragua, Panama and El Salvador) are affected through sizeable direct trade linkages with the United States, and through indirect trade linkages with third countries. This paper explores the potential long-term economic effects of these tariff increase...

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Working PaperJune 19, 2026

Minimum Wages and the Informality Constraint

How does informality shape the impact of minimum wage policy? We study this question using evidence from Mexico’s 145% real increase in the minimum wage since 2016, together with a general equilibrium model featuring endogenous informality and household heterogeneity. Reduced-form estimates of the implemented increases indicate limited effects on employment and formalization, alongside modest wage gains at the bottom of the formal wage distribution that arguably reflect incomplete enforcement...

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ReportJune 17, 2026

Hong Kong SAR: Diversifying and Broadening Revenue

Hong Kong SAR has faced persistent fiscal pressures amid declining fiscal revenue associated with changes in land use (land premiums), reduced stock market initial public offerings, headwinds to corporate profits, and weakness in the labor market. While recent revenue measures have provided partial relief, medium- to long-term pressures from population aging, rising social and healthcare spending, pensions, and large-scale public investment are expected to intensify. Maintaining strong fiscal...

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ReportJune 17, 2026

Diagnosis of Decreasing Labor Force Participation in Hong Kong SAR

Hong Kong SAR is facing a sustained decline in labor force participation rate (LFPR), which accelerated in recent years, driven mainly by population aging and further exacerbated by a drop in participation among youth. While the decline in youth LFPR was partly attributable to the mechanical effect of rising share of non-local students in Hong Kong SAR, it also points to postponed labor market entry among the youth which largely reflects continued education. The underlying motivations may sug...

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ReportJune 17, 2026

Nigeria’s Shift to a Floating Regime: Interest Rate and Exchange Rate Pass-Through and Policy Effectiveness

In June 2023, Nigeria transitioned from a multi-window, managed exchange rate system to a floating regime. This paper examines how the regime change altered the interest rate and exchange rate pass-through (ERPT) using econometrics cointegration methods and a Bayesian VAR estimated over 2007–2025. We show that ERPT is highly shock-dependent. under the pre-unification regime, pass-through was muted or negative, reflecting policy insulation through reserve management and capital controls. Follo...

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ReportJune 17, 2026

Inflation in Nigeria: A Descriptive Analysis of Recent Developments

As a result of recent reforms, inflation persistence in Nigeria has declined and the economy's responsiveness to monetary policy actions is improving. Historically, inflation in Nigeria was driven by food prices, supply-side shocks, deficit financing, and episodes of pronounced exchange rate depreciation, especially in 2016 and after the 2023 unification of foreign exchange windows. These reforms are breaking the entrenched patterns of inflation, reducing the impact of past drivers and helpin...

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Working PaperJune 12, 2026

Targeting State Aid: Firm-level Evidence from France

This paper examines the firm-level impact of state aid in France from 2016–23 and how targeting affects economic outcomes. Using firm-level data and a difference-in-differences approach, we find that aid is most effective for young firms, improving real outcomes while also crowding in private debt financing. Size-based targeting, by contrast, has limited impact. R&D support is particularly effective for young firms in high-tech sectors, and energy aid has the strongest effects in manufacturin...

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