Institutional research & analysis

Source: IMF

INSTITUTIONAL

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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Working PaperJune 12, 2026

Wage Dynamics in Europe: Drivers, Institutional Amplifiers, and Policy Spillovers

This paper examines the drivers of wage growth in Europe and assesses whether the 2022–23 inflation surge has altered wage-setting dynamics, using cross-country macro evidence for 26 European economies, agreement-level collective bargaining data for Spain, and estimates of minimum and public sector wage spillovers. We find that the slope of the wage Phillips curve has not materially changed since the pandemic—labor market slack continues exerting a restraining influence on wage growth. Howeve...

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Working PaperJune 12, 2026

HANK-Based Fiscal Consolidation for a High-Debt Advanced Euro Area Economy

High-debt euro area economies face fiscal consolidation in a low-growth environment. We use a Heterogeneous Agent New Keynesian model to assess how consolidation composition shapes aggregate and distributional outcomes in a representative high-debt economy. The status quo is not neutral: delay generates its own costs through lower investment, higher debt service, and damage to constrained households. For a given fiscal effort, expenditure-based consolidation achieves faster debt reduction wit...

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Working PaperJune 12, 2026

Innovation, Human Capital, and Taxation: Evidence from a Structural Model of the Canadian Economy

Canada’s innovation performance has been strong but shows limited upward momentum despite generous research and development (R&D) subsidies. This paper develops an endogenous innovation, multisector, heterogeneous-agent model calibrated to the Canadian economy to evaluate fiscal policies that promote innovation and growth. The impact of R&D subsidies depends critically on the supply of high-skilled labor. When the supply of scientists is inelastic, subsidies raise research wages, crowd out pr...

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Working PaperJune 12, 2026

Persistent Temperature, Capital Structure, and the Long-Run Level of Output

This paper shows that separating persistent (permanent) temperature changes from transitory weather fluctuations can reshape our understanding of the macroeconomic costs of warming. Using a Kalman filter state-space decomposition, it separates temperature into a permanent component and transitory weather fluctuations, and links the permanent component to trend output using a panel cointegration and error-correction framework. A one-degree Celsius higher permanent temperature is associated wit...

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Working PaperJune 12, 2026

Central Clearing for Government Securities Repos: A CCP-Centric Perspective

Government securities-backed repo markets constitute a key funding source for market participants in many jurisdictions. A number of recent stress episodes, e.g., in US and UK repo markets, has led to renewed efforts to strengthen the resilience of repo markets. This notably includes a push to increased central clearing via central counterparties (CCPs) which may come via market incentives or in the form of mandatory clearing. Central clearing is commonly considered as a key tool to increase ...

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Working PaperJune 12, 2026

Barriers to a European Banking Union

We quantify barriers to cross-border banking within the euro area and their consequences for credit allocation and output. Using loan-level data from the European credit registry (AnaCredit) and group structures (RIAD), we estimate barriers to relationship formation, loan pricing, and banks’ branching decisions at the country-pair level. We find that barriers to cross-border relationships between banks and firms and cross-border bank entry are large while wedges on interest rates and loan qua...

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Working PaperJune 12, 2026

Decoding Fiscal Messaging: How G7 Finance Ministries Communicate

Fiscal policy has re-emerged as a central tool of macroeconomic stabilization, yet the way governments communicate fiscal choices remains poorly understood. This paper provides the first systematic analysis of fiscal communication across the G7 from 2000–2024. Using a new dataset of budget documents, ministerial speeches, and press communiqués, we examine the clarity, thematic content, and rhetorical tone of official fiscal statements through computational text-analysis methods. We uncover a ...

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Working PaperJune 12, 2026

ASEAN’s Trade and Investment in a Fragmented World

This paper examines the short- and medium-term effects of the 2018–19 China-U.S. tariff increases on the trade and investment flows of ASEAN member economies. Using granular trade data, we demonstrate that several ASEAN countries experienced a disproportionate growth in exports of products that were targeted by these tariffs. To further explore the dynamic and often immediate responses of international capital flows to these trade policy shifts, we leverage a novel firm-level FDI database tha...

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ReportJune 11, 2026

Resilience Through Inclusion: Women and Data-Driven Climate Policies in Rwanda

Climate shocks represent a recurrent macroeconomic risk for Rwanda, affecting growth, fiscal stability, and household welfare. Gender inclusion is macro-critical to Rwanda’s growth and resilience strategy, shaping the effectiveness of adaptation and fiscal policy responses. Women are highly exposed to these shocks due to their concentration in agriculture and informal employment, as well as more limited access to finance, assets, and coping mechanisms. Using both micro- and macro-level analys...

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