CHAPTER 13 Keeping Capital Flowing: The Role of the IMF
- Alessandro Rebucci, and Ashoka Mody
- Published Date:
- April 2006
- Michael Bordo, Ashoka Mody and Nienke Oomes1
In this chapter, we examine the IMF’s role in maintaining the access of emerging market economies to international capital markets. We find evidence that both macroeconomic aggregates and capital flows improve following the adoption of an IMF program, although they may initially deteriorate somewhat. Consistent with theoretical predictions and earlier empirical findings, we find that IMF programs are most successful in improving capital flows to countries with bad, but not very bad fundamentals. In such countries, IMF programs are also associated with improvements in the fundamentals themselves.