The IMF Approach to Economic Stabilization
July 1, 1999
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Summary
This paper explains the IMF approach to economic stabilization. It argues that a Fund-supported program is a process, comprising six broadly defined phases, that evolves along a multiplicity of potential pathways. The paper discusses the three-pronged approach to stabilization at the core of all IMF-supported programs, stresses the iterative character of “financial programming,” and explains the rationale for setting quantitative performance criteria for fiscal and monetary policy in IMF-supported arrangements. A main theme is that IMF-supported programs contain a great deal of flexibility to respond both to differences in circumstances and to changes in conditions in individual cases.
Subject: Central banks, Domestic credit, Exchange rates, Financial crises, Fiscal policy, Foreign exchange, International reserves, Monetary base, Money
Keywords: Domestic credit, Eastern Europe, economic stabilization, Exchange rates, expiring IMF program, financial support, heterogenous IMF membership, IMF approach, IMF arrangement, IMF conditionality, IMF mandate, IMF prescription, IMF program, IMF staff, IMF support, IMF surveillance, IMF-supported program, IMF-supported programs, International reserves, Monetary base, quantitative approach, WP
Pages:
42
Volume:
1999
DOI:
Issue:
104
Series:
Working Paper No. 1999/104
Stock No:
WPIEA1041999
ISBN:
9781451852745
ISSN:
1018-5941
