Working Paper: NBER ID: w10834
Authors: Michael D. Bordo; Ashoka Mody; Nienke Oomes
Abstract: In this paper, we examine the IMF's role in maintaining the access of emerging market economies to international capital markets. We find evidence that both macroeconomic aggregates and capital flows improve following the adoption of an IMF program, although they may initially deteriorate somewhat. Consistent with theoretical predictions and earlier empirical findings, we find that IMF programs are most successful in improving capital flows to countries with bad, but not very bad fundamentals. In such countries, IMF programs are also associated with improvements in the fundamentals themselves.
Keywords: No keywords provided
JEL Codes: F33; F34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| IMF program adoption (F33) | improvements in macroeconomic aggregates (E69) |
| IMF program adoption (F33) | GDP growth (O49) |
| IMF program adoption (F33) | inflation (E31) |
| IMF program adoption (F33) | current account balance (F32) |
| IMF program adoption (F33) | capital flows (F32) |
| bad initial economic fundamentals (E66) | capital flows improvement under IMF programs (F32) |
| IMF programs (F33) | stabilize investor confidence (G18) |
| IMF programs (F33) | facilitate recovery (F35) |