Refocusing the IMF

Foreign Affairs, Volume 77, No. 2, March/April 1998

Posted: 11 May 1998

See all articles by Martin S. Feldstein

Martin S. Feldstein

National Bureau of Economic Research (NBER) (deceased); Harvard University (deceased)

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Abstract

NOTE: This is a description of the paper and is not the actual abstract.

This paper discusses the role of the IMF in the current Asian "economic crisis". It traces the evolution of the IMF policy from macroeconomic policies in currency crises to the current attempt to impose very detailed structural reforms. The precipitating problem in Thailand and Indonesia was a massive current account deficit based on a fixed exchange rate. In Korea it was very different: excess short term speculative international borrowing leading to a mismatch of short term liabilities and currency reserves. The paper discusses why the IMF macropolicies are too contractionary and why the structural reform policies inappropriately interfere with the policies that, whether good or bad, should be left to sovereign governments.

JEL Classification: F3

Suggested Citation

Feldstein, Martin S., Refocusing the IMF. Foreign Affairs, Volume 77, No. 2, March/April 1998, Available at SSRN: https://ssrn.com/abstract=85548

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