Strengthening IMF Crisis Prevention

23 Pages Posted: 3 Mar 2006

See all articles by Jonathan D. Ostry

Jonathan D. Ostry

Georgetown University; International Monetary Fund (IMF)

Jeromin Zettelmeyer

International Monetary Fund (IMF); Peterson Institute for International Economics; CEPR

Date Written: November 2005

Abstract

To better fulfill its crisis-prevention mandate, IMF surveillance needs to provide stronger incentives for countries to follow good policies and for markets to avoid boom-bust cycles in capital flows. To this end, surveillance should culminate in a summary public assessment of the quality of a country`s policies and stipulate the actions needed to address shortcomings. A country`s potential access to IMF credits should be linked to the quality of its policies in noncrisis periods in order to create stronger incentives for better policies and reduce incentives for capital to flow where it cannot be used in socially beneficial ways.

Keywords: International Monetary Fund, Crisis prevention, IMF surveillance

JEL Classification: F02, F33, F34

Suggested Citation

Ostry, Jonathan D. and Zettelmeyer, Jeromin, Strengthening IMF Crisis Prevention (November 2005). IMF Working Paper No. 05/206, Available at SSRN: https://ssrn.com/abstract=888075

Jonathan D. Ostry (Contact Author)

Georgetown University ( email )

Washington, DC 20057
United States

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Jeromin Zettelmeyer

International Monetary Fund (IMF) ( email )

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

Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

CEPR ( email )

London
United Kingdom

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