{
  "title": "Effect of IMF Structural Adjustment Programs on Expectations: The Case of Transition Economies",
  "publication": "IMF Working Papers, November 1, 2007",
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  "summary": "We analyze the effect of IMF programs on economic agents' expectations about the economy in transitional countries using survey data from the Central and Eastern Eurobarometer poll, an annual general public survey monitoring the evolution of public opinion from 1990 to 1997.",
  "sections": [
    {
      "heading": "Summary and main findings",
      "content": "- Analysis uses survey data from the Central and Eastern Eurobarometer poll, an annual general public survey monitoring the evolution of public opinion from 1990 to 1997.\n- Previous studies relied on indirect measures (capital flows, yield spreads) to assess IMF program effects on expectations; this study uses direct survey measures of agent expectations.\n- Using a multinomial probit model, the paper finds:\n  - IMF loans appear to have a strong effect on agent expectations in the early years, through the inflow of real money, and through the signaling effect.\n  - During periods of collapsing growth, IMF programs appear to reinforce underlying expectations for the future:\n    - Associated with positive expectations for agents with an optimistic outlook.\n    - Associated with negative expectations for agents with a negative outlook.\n  - Once recovery is underway and economic uncertainty diminishes, IMF programs cease to have a statistically significant effect on the expectations of economic agents.\n- Conclusion: IMF programs have the biggest impact on expectations during periods of great uncertainty and less impact when countries face minor shocks."
    },
    {
      "heading": "Methodology",
      "content": "- Data source: Central and Eastern Eurobarometer poll (annual general public survey) covering 1990 to 1997.\n- Econometric approach: multinomial probit model.\n- Comparative note: contrasts with prior work that used indirect indicators (capital flows, yield spreads) to infer expectations."
    },
    {
      "heading": "Policy implications and interpretation",
      "content": "- IMF lending and program involvement can influence public expectations via two channels:\n  - Liquidity/inflow channel: the inflow of real money from loans.\n  - Signaling channel: the presence of IMF support signals commitment or policy intent.\n- Timing matters:\n  - Programs are most impactful on expectations during acute downturns and high uncertainty.\n  - During recoveries with reduced uncertainty, IMF program presence does not significantly alter expectations.\n- Implication for program design: consider the informational and liquidity roles of IMF support especially in early, high-uncertainty phases of crises.\n\n---\n\n Content in this bundle\n\n- wp07261\n  - wp07261 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp07261 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/effect-of-imf-structural-adjustment-programs-on-expectations-the-case-of-transition-economies-21449"
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    "Authors: Patrick A. Imam",
    "Published: November 1, 2007",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451868241.001",
    "Analysis uses survey data from the Central and Eastern Eurobarometer poll, an annual general public survey monitoring the evolution of public opinion from 1990 to 1997.",
    "Previous studies relied on indirect measures (capital flows, yield spreads) to assess IMF program effects on expectations; this study uses direct survey measures of agent expectations.",
    "Using a multinomial probit model, the paper finds:",
    "Conclusion: IMF programs have the biggest impact on expectations during periods of great uncertainty and less impact when countries face minor shocks.",
    "Data source: Central and Eastern Eurobarometer poll (annual general public survey) covering 1990 to 1997.",
    "Econometric approach: multinomial probit model.",
    "Comparative note: contrasts with prior work that used indirect indicators (capital flows, yield spreads) to infer expectations.",
    "IMF lending and program involvement can influence public expectations via two channels:",
    "Timing matters:",
    "Implication for program design: consider the informational and liquidity roles of IMF support especially in early, high-uncertainty phases of crises.",
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