Keeping Capital Flowing: The Role of the IMF
48 Pages Posted: 29 Oct 2004 Last revised: 10 Aug 2010
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Keeping Capital Flowing: The Role of the IMF
Date Written: October 2004
Abstract
In this paper, we examine the IMF's role in maintaining the access of emerging market economies to international capital markets. We find evidence that both macroeconomic aggregates and capital flows improve following the adoption of an IMF program, although they may initially deteriorate somewhat. Consistent with theoretical predictions and earlier empirical findings, we find that IMF programs are most successful in improving capital flows to countries with bad, but not very bad fundamentals. In such countries, IMF programs are also associated with improvements in the fundamentals themselves.
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