International Monetary Fund

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Research at the IMF

Macro Research for Development:
An IMF-DFID Collaboration

October 29, 2014

Picture: Crown CopyrightIMF

Having weathered the 2008-09 financial crises, most low-income countries (LICs) have reported steady growth since early 2010.

With the external environment as uncertain as ever, and daunting developmental goals unmet, LICs are still facing a whirlwind of macroeconomic challenges. Therefore, the IMF is partnering with the UK's Department for International Development (DFID) to study critical LIC macroeconomic policy issues. The project will focus on six topics:

1) Monetary and exchange rate policies;

2) Public investment, growth, and debt sustainability;

3) Macroeconomic management of natural resources;

4) Macroeconomic policies and income distribution;

5) Financial deepening for macroeconomic stability and sustained growth; and

6) Growth through diversification.

To secure maximum policy impact, the team will collaborate closely with policymakers within and outside the IMF and outside academics, particularly those in developing country policy institutions.

This website showcases the team's efforts; summarizes research papers, frameworks, and tools; and reports on a series of conferences and workshops. Equally important, the website illustrates applications of the research, whether in an IMF country team's Article IV consultation or directly by country authorities.

Terms of the Project

With the support of DFID, the IMF's Development Macroeconomic (DM) division of the Research Department and the Low-Income Countries Strategy Unit (LU) of the Strategy, Policy, and Review Department have scaled up their operations. The project started in March 2012 and will continue for three years, using the new resources to hire researchers, organize conferences, and work with country authorities on applying the frameworks and tools. The project is governed by the following four goals:

  1. Generate high-quality applied research on macroeconomic issues in low-income countries;
  2. Ensure research uptake by collaborating closely with policymakers within and outside the IMF in research design, execution, and applications;
  3. Use the IMF's pulling power to expand the network of researchers working on macroeconomic issues in LICs; and
  4. Achieve this as cost effectively as possible.

Visiting Fellows

Professor Edward Buffie is developing customized DIG (Debt, Investment and Growth) models for Senegal and Ethiopia. Policy makers in both countries are using the models to analyze the debt sustainability of their big-push public investment programs. In addition to the work on country-specific DIG models, Professor Buffie is also working on the construction of open-economy models of inflation targeting suitable for LICs.