Sudden Stops and IMF-Supported Programs

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

No 12235, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Could a high-access, quick-disbursing %u201Cinsurance facility%u201D in the IMF help to reduce the incidence of sharp interruptions in capital flows (%u201Csudden stops%u201D)? We contribute to the debate on 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 %u201Cinsurance%u201D 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.

JEL-codes: F02 F32 F34 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-acc, nep-cba and nep-fmk
Date: 2006-05
Note: IFM
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Chapter: Sudden Stops and IMF-Supported Programs (2008)
Working Paper: Sudden Stops and IMF-Supported Programs (2006)
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