On the IMF Stabilization Program in Bangladesh

The Empirical Economics Letters, Vol. 4, No. 4, July 2005

Posted: 28 Sep 2005  

Monzur Hossain

Bangladesh Institute of Development Studies

Abstract

This paper shows an application of the IMF Financial Programming Model to understand the relevance of the IMF stabilization program in Bangladesh started in 2002. The model has been revitalized in an innovative way to predict an equilibrium position of the economy, which ensures a viable BOP. The model outcome suggests that a viable BOP can be achieved through expenditure cut, restraining domestic credit and increasing net foreign reserve to around 1900 million US$, equivalent to 3-month import payment in the year. The model also suggests that Bangladesh needs to increase net foreign assets at a higher rate than domestic assets to maintain stable inflation rate and viable BOP position.

Keywords: Bangladesh economy, IMF stabilization program, IMF financial programming model

JEL Classification: E10, E17, F00, F47, O11

Suggested Citation

Hossain, Monzur, On the IMF Stabilization Program in Bangladesh. The Empirical Economics Letters, Vol. 4, No. 4, July 2005. Available at SSRN: https://ssrn.com/abstract=807706

Monzur Hossain (Contact Author)

Bangladesh Institute of Development Studies ( email )

E-17 Agargaon, Sher-e-Bangla Nagar
Dhaka, 1207
Bangladesh

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