Keeping Capital Flowing: The Role of the IMF
IMF Working Papers, October 1, 2004
Source details
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- Keeping Capital Flowing: The Role of the IMF
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Bibliographic details
- Authors: Michael D. Bordo, Ashoka Mody, Nienke Oomes
- Published: October 1, 2004
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451860047.001
Summary
- Paper examines the IMF's role in maintaining the access of emerging market economies to international capital markets.
- Finds evidence that both macroeconomic aggregates and capital flows improve following the adoption of an IMF-supported program, although they may initially deteriorate somewhat.
- IMF-supported programs are most successful in improving capital flows to countries with bad, but not very bad fundamentals.
- In countries with bad, but not very bad fundamentals, IMF-supported programs are also associated with improvements in the fundamentals themselves.
Major findings
- Both macroeconomic aggregates and capital flows improve following adoption of an IMF-supported program, with possible initial deterioration.
- Program effectiveness is conditional on initial fundamentals:
- Most successful in countries with bad, but not very bad fundamentals.
- In such countries, IMF-supported programs are associated with improvements in fundamentals.
- Consistent with theoretical predictions and earlier empirical findings.
Subjects and keywords
- Subject: Capital flows, Current account, Current account deficits, Emerging and frontier financial markets, International capital markets
- Keywords: capital flow, IMF lending, IMF program, IMF signal, IMF surveillance, WP