Keeping Capital Flowing: The Role of the IMF

By Michael D. Bordo, Ashoka Mody, Nienke Oomes

October 1, 2004

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Michael D. Bordo, Ashoka Mody, and Nienke Oomes. Keeping Capital Flowing: The Role of the IMF, (USA: International Monetary Fund, 2004) accessed December 23, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

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-supported program, although they may initially deteriorate somewhat. Consistent with theoretical predictions and earlier empirical findings, we find that IMF-supported programs are most successful in improving capital flows to countries with bad, but not very bad fundamentals. In such countries, IMF-supported programs are also associated with improvements in the fundamentals themselves.

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

Publication Details

Pages:

35
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2004/197
Stock No:

WPIEA1972004
ISBN:

9781451860047
ISSN:

1018-5941

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