Who Is Afraid of Informal Competition?

Competition by informal firms is one of the most severe business constraints in developing and transition economies: When asked for the three main business obstacles, 12 % of firms listed informal competition, only topped by access to finance (16 %) and tax rates (15 %, see figure 1). In general, two thirds of firms considered informal competition as […]

Managing Capital Flows: The Role of Information

Surges in international capital flows pose serious macroeconomic challenges to policy makers in many economies, especially emerging and developing countries. Besides from worries about the economy’s competitiveness due to appreciation pressures, their main concern is increased systemic risk due to “sudden stops” or boom-and-bust cycles. The extent of foreign capital inflows fuelling the US housing […]