EconStor >
Bank of Canada, Ottawa >
Bank of Canada Working Papers >

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

http://hdl.handle.net/10419/53950
  
Title:IMF-supported adjustment programs: Welfare implications and the catalytic effect PDF Logo
Authors:De Resende, Carlos
Issue Date:2007
Series/Report no.:Bank of Canada Working Paper 2007,22
Abstract:The author studies the welfare implications of adjustment programs supported by the International Monetary Fund (IMF). He uses a model where an endogenous borrowing constraint, set up by international lenders who will never lend more than a debt ceiling, forces the borrowing economy to always choose repayment over default. The immediate potential welfare cost of joining a program is driven by IMF conditionality: to be able to borrow from the IMF, the country has to submit to limits on the consumption of public goods. The benefits derive from the additional borrowing from the IMF (at a lower interest rate) and/or through a catalytic effect on private loans, which facilitates consumption smoothing over time. Simulations of the dynamic model in two institutional environments
Subjects:with and without the IMF
JEL:F32
F33
F34
F41
Document Type:Working Paper
Appears in Collections:Bank of Canada Working Papers

Files in This Item:
File Description SizeFormat
529369877.pdf535.42 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/53950

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