Review of Facilities for Low-Income Countries - Supplement 1
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
This supplement aims to assess the economic impact of the Fund’s support through its facilities for low-income countries (LICs). It relies on two complementary econometric analyses: the first investigates the longer-term impact of Fund engagement—primarily through successive medium-term programs under the Extended Credit Facility (ECF) and its predecessors (and more recently the Policy Support Instrument (PSI))—on economic growth and a range of other indicators and socio-economic outcomes; the second focuses on the role of IMF shock-related financing—through augmentations of ECF arrangements and short-term and emergency financing instruments—on short-term macroeconomic performance. The empirical results shed some light on two channels through which different Fund facilities may have helped LICs respond to the global financial crisis—(i) by supporting a gradual buildup of macroeconomic buffers in the decades prior to the crisis and (ii) by providing liquidity support at the height of the crisis. The combination of strong pre-crisis buffers and crisis financing allowed LICs to pursue counter-cyclical policy responses that preserved spending and facilitated a rapid recovery.
Series:
Policy Papers
Subject:
Access to Fund general resources Concessional aid Conditionality Emergency assistance Exogenous Shocks Facility Extended Credit Facility Extended Fund Facility Fund facilities General Resources Account Low-income developing countries Policy Support Instrument Precautionary and Liquidity Line Rapid Credit Facility Staff-monitored programs Stand-by arrangements Standby Credit Facility Use of Fund resources
English
Publication Date:
July 26, 2012
Format:
Paper
Please address any questions about this title to publications@imf.org