The IMF and the Liberalization of Capital Flows
AbstractWe evaluate the claim that the International Monetary Fund precipitated financial crises during the 1990s, by pressuring countries to liberalize their capital accounts prematurely. Using data from a panel of developing economies from 1982-98, we examine whether the changes in the regime governing capital flows took place during participation in IMF programs. We find evidence that IMF program participation is correlated with capital account liberalization episodes during the 1990s. We verify the robustness of our results using alternative indicators of capital account openness. To determine whether decontrol was premature, we compare the economic and financial characteristics of countries that decontrolled during IMF programs with those of countries who did so independently, and find some evidence of IMF-led premature liberalizations. Copyright � 2008 The Authors. Journal compilation � 2008 Blackwell Publishing Ltd.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Review of International Economics.
Volume (Year): 16 (2008)
Issue (Month): 3 (08)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576
Other versions of this item:
- Ilan Noy & Joseph P. Joyce, 2007. "The IMF and the Liberalization of Capital Flows," Working Papers 200706, University of Hawaii at Manoa, Department of Economics.
- Joseph P Joyce & Ilan Noy, 2005. "The IMF and the Liberalization of Capital Flows," Economics Study Area Working Papers 84, East-West Center, Economics Study Area.
- F3 - International Economics - - International Finance
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