Estimating Demand for IMF Financing by Low-Income Countries in Response to Shocks

December 1, 2009

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Format: Chicago

Yasemin Bal Gunduz. Estimating Demand for IMF Financing by Low-Income Countries in Response to Shocks, (USA: International Monetary Fund, 2009) accessed September 20, 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

This paper estimates factors affecting demand for Fund financing by Low-Income Countries (LICs) in response to policy and exogenous shocks. Various economic variables including reserve coverage, current account balance to GDP, real GDP growth, macroeconomic stability, and terms of trade shocks are found to be significant determinants of Fund financing. Moreover, global conditions, including changes in real oil and non-oil commodity prices and world trade, are also significant. Therefore, the demand for Fund financing by LICs is likely to be cyclical in response to common shocks with its intensity depending on the severity and persistence of adverse shocks.

Subject: Balance of payments need, Commodity prices, Current account balance, Oil prices, Terms of trade

Keywords: Fund financing, Real GDP, WP

Publication Details

Pages:

55
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2009/263
Stock No:

WPIEA2009263
ISBN:

9781451874082
ISSN:

1018-5941

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