The IMF Approach to Economic Stabilization

Miguel Savastano and Michael Mussa

No 1999/104, IMF Working Papers from International Monetary Fund

Abstract: This paper explains the IMF approach to economic stabilization. It argues that a Fund-supported program is a process, comprising six broadly defined phases, that evolves along a multiplicity of potential pathways. The paper discusses the three-pronged approach to stabilization at the core of all IMF-supported programs, stresses the iterative character of “financial programming,” and explains the rationale for setting quantitative performance criteria for fiscal and monetary policy in IMF-supported arrangements. A main theme is that IMF-supported programs contain a great deal of flexibility to respond both to differences in circumstances and to changes in conditions in individual cases.

Keywords: WP; IMF program; IMF approach; IMF conditionality; IMF-supported program; IMF arrangement; IMF staff; IMF-supported programs; economic stabilization; quantitative approach; financial support; IMF prescription; IMF mandate; heterogenous IMF membership; IMF surveillance; expiring IMF program; IMF support; Domestic credit; International reserves; Monetary base; Exchange rates; Eastern Europe (search for similar items in EconPapers)
Pages: 42
Date: 1999-07-01
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Citations: View citations in EconPapers (76)

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Chapter: The IMF Approach to Economic Stabilization (2000)
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