The IMF and the Liberalization of Capital Flows

Joseph Joyce and Ilan Noy

No 84, Economics Study Area Working Papers from East-West Center, Economics Study Area

Abstract: Using data from a panel of developing economies from the 1982-98 period, the claim that the International Monetary Fund precipitated financial crises during the 1990s by pressuring countries to liberalize their capital accounts prematurely is evaluated. Examining whether the changes in the regime governing capital flows took place during participation in IMF programs, evidence finds that IMF program participation is correlated with capital account liberalization episodes during the 1990s. Alternative indicators of capital account openness were used to test the robustness of the results by comparing the economic and financial characteristics of countries that decontrolled during IMF programs with those of countries who did so independently to determine whether decontrol was premature.

JEL-codes: F3 (search for similar items in EconPapers)
Pages: pages 40
Date: 2005-08
New Economics Papers: this item is included in nep-cba, nep-fdg, nep-fmk, nep-ifn and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: The IMF and the Liberalization of Capital Flows (2008)
Working Paper: The IMF and the Liberalization of Capital Flows (2007)
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