Sudden Stops and IMF-Supported Programs

Ashoka Mody, Poonam Gupta () and Barry Eichengreen ()

No 06/101, IMF Working Papers from International Monetary Fund

Abstract: Could a high-access, quick-disbursing "insurance facility" in the IMF help to reduce the incidence of sharp interruptions in capital flows ("sudden stops")? We contribute to the debate around this question by analyzing the impact of conventional IMF-supported programs on the incidence of sudden stops. Correcting for the non-random assignment of programs, we find that sudden stops are fewer and generally less severe when an IMF arrangement exists and that this form of "insurance" works best for countries with strong fundamentals. In contrast there is no evidence that a Fund-supported program attenuates the output effects of capital account reversals if these nonetheless occur.

Keywords: Sudden stops; insurance; IMF - supported programs; Fund-supported adjustment programs; Insurance; Capital flows; Capital account (search for similar items in EconPapers)
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Date: 2006-04-28
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Related works:
Chapter: Sudden Stops and IMF-Supported Programs (2008)
Working Paper: Sudden Stops and IMF-Supported Programs (2006)
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