The IMF Monetary Model At Forty
April 1, 1997
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Summary
A model reflecting the monetary approach to the balance of payments was developed in the International Monetary Fund (IMF) in the 1950s. Its purpose was to integrate monetary, income, and balance of payments analysis, and it became the basis of the conditionality applied to IMF credits. Extremely simple, with primary focus on the balance of payments effects of credit creation by the banking system, the model has retained its usefulness for policy purposes over time, as it was adapted to changes in member countries’ priorities and in the international monetary system, in particular the disappearance of the par value system.
Subject: Credit, Currencies, Domestic credit, Exchange rates, Foreign exchange, Monetary base, Money
Keywords: balance of payments result, Baltics, Credit, credit creation, Currencies, customer country, deficit, demand for money, Domestic credit, Eastern Europe, econometric models, Europe, excess demand, Exchange rates, fund assistance, fund program, fund stand-by, IMF, monetary approach to the balance of payments, Monetary base, policy approach, programming exercise, West Africa, WP
Pages:
20
Volume:
1997
DOI:
Issue:
049
Series:
Working Paper No. 1997/049
Stock No:
WPIEA0491997
ISBN:
9781451846805
ISSN:
1018-5941
