Does the IMF Help or Hurt? The Effect of IMF Programs on the Likelihood and Outcome of Currency Crises
نویسندگان
چکیده
— We empirically analyze the effect of International Monetary Fund (IMF) involvement on the risk of entering a currency crisis and, respectively, the outcome of such a crisis. Specifically, we investigate whether countries with previous IMF intervention are more likely to experience currency crises. In a second step, we analyze the IMF’s impact on a country’s decision to adjust the exchange rate, once a crisis occurs. We find that IMF involvement reduces the probability of a crisis. Once in a crisis, IMF programs significantly increase the probability that the authorities devalue the exchange rate. The amount of loans and compliance with conditionality have no impact. 2009 Elsevier Ltd. All rights reserved.
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Does the IMF Help or Hurt? The Effect of IMF Programs on the on the Likelihood and Outcome of Currency Crises
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The paper by Barry Eichengreen and Ricardo Haussman is correct to focus on the policies that the emerging market countries (EMC) themselves can pursue to reduce the risk of future economic crises, instead of discussing new policies for the IMF or for the industrial countries that some analysts hope might achieve that goal. I agree with their emphasis on EMC self-help and on the multiple causes ...
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