License to Spill: How Do We Discuss Spillovers in Article IV Staff Reports
25 Pages Posted: 4 Feb 2022
Date Written: May 1, 2021
This paper dives into the Fund’s historical coverage of cross-border spillovers in its surveillance. We use a state-of-the-art deep learning model to analyze the discussion of spillovers in all IMF Article IV staff reports between 2010 and 2019. We find that overall, while the discussion of spillovers decreased over time, it was pronounced in the staff reports of some systemically important economies and during periods of global spillover events. Spillover discussions were more prominent in staff reports covering advanced and emerging market economies, possibly reflecting their role as sources of global spillovers. The coverage of spillovers was higher in the context of the real, financial, and external sectors. Also, countries with larger economies, higher trade and capital account openess and lower inflation are more likely to discuss spillovers in their Article IV staff reports.
Keywords: spillover discussion, model performance, discussion of spillover, General spillover pattern, spillover event, IMF staff calculation, Spillovers, Probit models, Machine learning, Capital account, Inflation, Global
JEL Classification: F31, E26, D62, C35, O33, F32, E31
Suggested Citation: Suggested Citation