EconStor >
Eidgenössische Technische Hochschule (ETH) Zürich >
KOF Konjunkturforschungsstelle, ETH Zürich >
KOF Working Papers, KOF Konjunkturforschungsstelle, ETH Zürich >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/50388
  
Title:Does the IMF help or hurt? The effect of IMF programs on the likelihood and outcome of currency crises PDF Logo
Authors:Dreher, Axel
Walter, Stefanie
Issue Date:2008
Series/Report no.:KOF working papers // Konjunkturforschungsstelle, Eidgenössische Technische Hochschule Zürich 186
Abstract:Using panel data for 68 countries over the period 1975-2002 this paper examines how IMF programs, disbursed loans, and compliance with conditionality affect the risk of currency crises and the outcome of such crises. Specifically, we investigate whether countries with previous IMF intervention are more likely to experience currency crises. In a second step, we analyze the IMF's impact on a country's decision to adjust the exchange rate, once a crisis occurred. We find that IMF involvement reduces the probability of a crisis. Once in a crisis, IMF programs significantly increase the probability that the authorities devalue the exchange rate. The amount of loans and compliance with conditionality have no impact. Our results suggest that the IMF - contrary to the Fund's critics - does indeed fulfill its functions of promoting exchange rate stability and helping its members to correct macroeconomic imbalances.
Subjects:IMF programs
growth
compliance
conditionality
JEL:F33
F34
O57
Persistent Identifier of the first edition:doi:10.3929/ethz-a-005510843
Document Type:Working Paper
Appears in Collections:KOF Working Papers, KOF Konjunkturforschungsstelle, ETH Zürich

Files in This Item:
File Description SizeFormat
583343279.pdf393.69 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/50388

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.