The Catalytic Role of IMF Programs
40 Pages Posted: 25 May 2021
Date Written: April 20, 2021
This paper investigates the impact of IMF programs on private capital flows in the assisted countries. We look at the impact on inflows and outflows of both traditional and precautionary programs, also taking into account the characteristics of the programs. Using the entropy balancing method to address the selection bias, we find that traditional IMF programs have an anticatalytic effect on private capital inflows; this effect is mainly driven by programs that went off-track and by exceptional access programs. By contrast, precautionary programs are found to have a catalytic effect, working mainly through outflows.
Keywords: International Monetary Fund, catalysis, capital flows
JEL Classification: F33, F34, G11, G15
Suggested Citation: Suggested Citation