Repeated Use of IMF-Supported Programs: Determinants and Forecasting
IMF Working Papers, November 8, 2019
Source details
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- Repeated Use of IMF-Supported Programs: Determinants and Forecasting
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Bibliographic details
- Authors: Martin Iseringhausen, Mwanza Nkusu, Wellian Wiranto
- Published: November 8, 2019
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513511689.001
Overview and research question
- Paper studies determinants of repeated use of Fund-supported programs covering virtually all General Resources Account (GRA) arrangements approved between 1952 and 2012.
- Context: IMF’s revolving resources are intended for temporary support to address balance of payments problems; repeated use has often been viewed as program failure.
- Methods: Probit models and an out-of-sample forecasting exercise.
Key empirical findings
- Country-specific variables with significant explanatory power for repeated use:
- Growth
- The current account balance
- The international reserves position
- The institutional framework
- IMF-specific and program-specific variables:
- A country’s track record with the Fund is a good predictor of repeated use.
- Forecasting performance:
- The approach has predictive power for repeated use.
- Exact forecasting remains challenging.
Policy implications
- Results could be useful to assess the risk IMF programs pose to the revolving nature of the Fund’s financial resources.
- Identifying key country-specific indicators (growth, current account balance, international reserves, institutional framework) can inform risk assessment and program design to limit repeated reliance on IMF resources.
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- Working Paper