- Ales Bulir, Marianne Schulze-Gattas, Atish Ghosh, Alex Mourmouras, A. Hamann, and Timothy Lane
- Published Date:
- February 2002
2002 International Monetary Fund
Production: IMF Graphics Section
Figures: Sanaa Elaroussi
Typesetting: Alicia Etchebarne-Bourdin
IMF-supported programs in capital account crises/Timothy Lane . . .
[et al.].—Washington, D.C.: International Monetary Fund, 2002.
p. cm.—(Occasional paper, ISSN 0251-6365; no. 210)
Includes bibliographical references.
1. International Monetary Fund—Developing countries. 2. Capital movements—Developing countries. 4. Balance of payments—Developing countries. 5. Crisis management—Developing countries. I. Lane, Timothy D. (Timothy David), 1955–. II. International Monetary Fund. III. Occasional papers (International Monetary Fund); no. 210.
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The following symbols have been used throughout this paper:
… to indicate that data are not available; n.a. to indicate not applicable;
— to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;
– between years or months (e.g., 2000–01 or January-June) to indicate the years or months covered, including the beginning and ending years or months;
/ between years (e.g., 2000–01) to indicate a crop or fiscal (financial) year.
“Billion” means a thousand million.
Minor discrepancies between constituent figures and totals are due to rounding. The term “country,” as used in this paper, does not in all cases refer to a territorial entity that is a state as understood by international law and practice; the term also covers some territorial entities that are not States, but for which statistical data are maintained and provided internationally on a separate and independent basis.
During the 1990s, a number of emerging market countries faced capital account crises, in which sudden reversals of capital inflows forced large and abrupt current account adjustments, often with pervasive macroeconomic consequences. The nature and scope of these crises presented challenges that differed considerably from those of more traditional adjustment programs. Given the dominant role of private capital flows, estimates of sustainable current account positions—and the appropriate balance between financing and adjustment—were subject to much greater uncertainty, the impact of macroeconomic policies on market confidence became critical, and structural policies had to address a variety of vulnerabilities that lay at the root of the crises.
This paper reviews the design of and experience with IMF-supported programs formulated in response to capital account crises in the 1990s, focusing on the experiences of eight countries: Turkey (1994), Mexico (1995), Argentina (1995), Thailand (1997), Indonesia (1997), Korea (1997), the Philippines (1997), and Brazil (1998). The review was prepared by a staff team under the general guidance of Jack Boorman, Director of the Policy Review Department. The staff team comprised Timothy Lane (Chief, Policy Review Division), Aleš Bulíř, Atish Ghosh, Javier Hamann, Alex Mourmouras, and Marianne Schulze-Ghattas.
The authors are grateful to numerous colleagues at the IMF for detailed comments on the paper: to Sibabrata Das, Tricia Gillett, and Ivetta Hakobyan for research assistance; and to Olivia Carolin, Brian Gallo, Fernanda Gusmao, and Sylvia Palazzo for secretarial assistance. Jacqueline Irving of the External Relations Department edited the manuscript and coordinated production of the publication.
The opinions expressed in the paper are those of the authors and do not necessarily reflect the views of the IMF or of its Executive Directors.