Keeping Capital Flowing: The Role of the IMF

Author/Editor:

Michael D. Bordo ; Ashoka Mody ; Nienke Oomes

Publication Date:

October 1, 2004

Electronic Access:

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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.

Series:

Working Paper No. 2004/197

Subject:

Capital flows Current account Current account deficits Emerging and frontier financial markets International capital markets

English

Publication Date:

October 1, 2004

ISBN/ISSN:

9781451860047/1018-5941

Stock No:

WPIEA1972004

Pages:

35

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