The IMF Approach to Economic Stabilization

Author/Editor:

Miguel A Savastano ; Michael Mussa

Publication Date:

July 1, 1999

Electronic Access:

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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 explains the IMF approach to economic stabilization. It argues that a Fund-supported program is a process, comprising six broadly defined phases, that evolves along a multiplicity of potential pathways. The paper discusses the three-pronged approach to stabilization at the core of all IMF-supported programs, stresses the iterative character of “financial programming,” and explains the rationale for setting quantitative performance criteria for fiscal and monetary policy in IMF-supported arrangements. A main theme is that IMF-supported programs contain a great deal of flexibility to respond both to differences in circumstances and to changes in conditions in individual cases.

Series:

Working Paper No. 1999/104

Subject:

Central banks Domestic credit Exchange rates Financial crises Fiscal policy Foreign exchange International reserves Monetary base Money

Frequency:

Irregular

English

Publication Date:

July 1, 1999

ISBN/ISSN:

9781451852745/1018-5941

Stock No:

WPIEA1041999

Pages:

42

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