Journal Issue

Greater Access to Data Promotes Market Efficiency

International Monetary Fund. External Relations Dept.
Published Date:
June 2008
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Prompted by the view that the severity of the emerging market crises of the 1990s was partially attributable to a lack of timely statistics, the international community asked the IMF to develop voluntary standards for the dissemination of economic and financial statistics.

The IMF established the Special Data Dissemination Standard (SDDS) in 1996 to guide IMF members that have, or that might seek, access to international capital markets in the dissemination of economic and financial data. It also prescribes that countries provide descriptions of required variables (metadata), along with preannounced time schedules for data releases.

The initiative’s other tier—the General Data Dissemination System (GDDS)—was established in 1997 to guide countries in developing sound statistical systems.

Ten years later, 153 of the IMF’s 185 member countries participate in the Data Dissemination Initiative. The initiative is now an integral part of the international financial architecture.

The IMF’s Data Dissemination Initiative After 10 Years, edited by William E. Alexander, John Cady, and Jesus Gonzalez-Garcia, describes the experience with the SDDS and the GDDS. The book details how the SDDS was enhanced in 1999 with the introduction of the reserves template as an additional required element, followed later by the addition of requirements related to external debt and the international investment position.

The volume also includes empirical papers on the market efficiency effects of the initiative and provides evidence that participation, in particular for SDDS subscribers, helps reduce both sovereign borrowing costs and exchange rate volatility. The book concludes with a discussion of future challenges and possible enhancements to the initiative.

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