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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AcknowledgementsWe thank Marta Banbura for sharing her Matlab codes and Domenico Giannone for his insightful comments. We would also like to thank seminar participants at the Bank of Canada for helpful comments and suggestions. Bryce Shelton provided excellent research assistance.iii AbstractEmerging-market economies have become increasingly important in driving global GDP growth over the past 10 to 15 years. This has made timely and accurate assessment of current and future economic activity in emerging markets important for policy-makers not only in these countries but also in advanced economies. This paper uses state-of-theart dynamic factor models (DFMs) to nowcast real GDP growth in five major emerging markets-Brazil, Russia, India, China and Mexico ("BRIC+M"). The DFM framework allows us to efficiently handle data series characterized by different publication lags, frequencies and sample lengths. This framework is particularly suitable for emerging markets for which many indicators are subject to significant publication lags and/or have been compiled only recently. The methodology also allows us to extract model-based "news" from a data release and assess the impact of this news on nowcast revisions. Results show that the DFMs generally outperform simple univariate benchmark models for the BRIC+M. Overall, our results suggest that the DFM framework provides reliable nowcasts for GDP growth for the emerging markets under consideration. JEL classification: C33, C53, E37 Bank classification: Econometric and statistical methods; International topics RésuméAu cours des dix à quinze dernières années, les économies de marché émergentes ont pris une place grandissante dans la croissance du PIB mondial. C'est pourquoi il est important que les responsables des politiques publiques de ces pays, mais également ceux des économies avancées, disposent de prévisions rapides et exactes de l'activité économique actuelle et future dans les marchés émergents. Dans la présente étude, les auteurs ont recours à des modèles à facteurs dynamiques avancés pour prévoir, pour un horizon allant du passé récent au futur proche, le taux de croissance du PIB réel de cinq grands marchés émergents, soit le Brésil, la Russie, l'Inde, la Chine et le Mexique (pays du BRIC+M). Ces modèles permettent de traiter efficacement des séries de données dont les délais et la fréquence de parution ainsi que la longueur de la période d'observation sont diff...

This paper presents a model of an emerging market sovereign that can selectively default on its domestic or external creditors. The two classes of creditors have different ways of punishing the government in the event of default, which in turn creates a differential in the sovereign's incentives to default on its domestic versus foreign creditors. We explore the extent to which the possibility of differential treatment of creditors affects the composition of debt. We find that a country characterized by volatile output, sovereign risk, and costly tax collection will want to borrow in domestic as well as in international markets. Copyright � 2010 Blackwell Publishing Ltd.

India's federal system is distinguished by tax and expenditure assignments that result in large vertical fiscal imbalances, and consequent transfers from the central government to the state governments. Several channels are used for these transfers: the Finance Commission, the Planning Commission, and central government ministries. We use panel data on center-state transfers to examine how the economic and political importance of the states influences the level and the composition of per capita transfers to the states, as well as differences in temporal patterns of Planning Commission and Finance Commission transfers. We find evidence that states with indications of greater bargaining power seem to receive larger per capita transfers, and that there is greater temporal variation in Planning Commission transfers.

Building on the growing evidence on the importance of large data sets for empirical macroeconomic modeling, we use a factor-augmented VAR (FAVAR) model with more than 260 series for 20 OECD countries to analyze how global developments affect the Canadian economy. We focus on several sources of shocks, including commodity prices, foreign economic activity, and foreign interest rates. We evaluate the impact of each shock on key Canadian macroeconomic variables to provide a comprehensive picture of the effect of international shocks on the Canadian economy. Our findings indicate that Canada is primarily exposed to shocks to foreign activity and to commodity prices. In contrast, the impact of shocks to global interest rates or global inflation is substantially lower. Our findings also expose the different channels through which higher commodity prices impact the Canadian economy: Canada benefits from higher commodity prices through a positive terms of trade shock, but at the same time, higher commodity prices tend to lower global economic activity, hurting demand for Canadian exports.