How Do Member Countries Receive IMF Policy Advice: Results from a State-of-the-Art Sentiment Index

43 Pages Posted: 28 Feb 2020

See all articles by Ghada Fayad

Ghada Fayad

International Monetary Fund (IMF)

Chengyu Huang

International Monetary Fund (IMF)

Yoko Shibuya

Stanford University

Peng Zhao

International Monetary Fund (IMF)

Date Written: January 2020

Abstract

This paper applies state-of-the-art deep learning techniques to develop the first sentiment index measuring member countries' reception of IMF policy advice at the time of Article IV Consultations. This paper finds that while authorities of member countries largely agree with Fund advice, there is variation across country size, external openness, policy sectors and their assessed riskiness, political systems, and commodity export intensity. The paper also looks at how sentiment changes during and after a financial arrangement or program with the Fund, as well as when a country receives IMF technical assistance. The results shed light on key aspects on Fund surveillance while redefining how the IMF can view its relevance, value added, and traction with its member countries.

Keywords: Fiscal sector, External sector, Economic conditions, Real sector, Commodity price indexes, IMF, Surveillance, Economic Policy, Sentiment Analysis, Natural Language Processing, WP, article IV, article IV consultation, paragraph, sector-specific

JEL Classification: F33, F42, C88, E01, G21, F1, E62, C43

Suggested Citation

Fayad, Ghada and Huang, Chengyu and Shibuya, Yoko and Zhao, Peng, How Do Member Countries Receive IMF Policy Advice: Results from a State-of-the-Art Sentiment Index (January 2020). Available at SSRN: https://ssrn.com/abstract=3545295 or http://dx.doi.org/10.2139/ssrn.3545295

Ghada Fayad (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Chengyu Huang

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Yoko Shibuya

Stanford University ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States

Peng Zhao

International Monetary Fund (IMF)

700 19th Street, N.W.
Washington, DC 20431
United States

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