Advanced Search
MyIDEAS: Login

Estimating Demand for IMF Financing by Low-Income Countries in Response to Shocks

Contents:

Author Info

  • Yasemin Bal-Gunduz
Registered author(s):

    Abstract

    This paper estimates factors affecting demand for Fund financing by Low-Income Countries (LICs) in response to policy and exogenous shocks. Various economic variables including reserve coverage, current account balance to GDP, real GDP growth, macroeconomic stability, and terms of trade shocks are found to be significant determinants of Fund financing. Moreover, global conditions, including changes in real oil and non-oil commodity prices and world trade, are also significant. Therefore, the demand for Fund financing by LICs is likely to be cyclical in response to common shocks with its intensity depending on the severity and persistence of adverse shocks.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=23424
    Download Restriction: no

    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 09/263.

    as in new window
    Length: 55
    Date of creation: 01 Dec 2009
    Date of revision:
    Handle: RePEc:imf:imfwpa:09/263

    Contact details of provider:
    Postal: International Monetary Fund, Washington, DC USA
    Phone: (202) 623-7000
    Fax: (202) 623-4661
    Email:
    Web page: http://www.imf.org/external/pubind.htm
    More information through EDIRC

    Order Information:
    Web: http://www.imf.org/external/pubs/pubs/ord_info.htm

    Related research

    Keywords: Access to Fund general resources; Balance of payments need; Compensatory and Contingency Financing Facility; Cooperation with Fund; Economic growth; External shocks; Foreign direct investment; Fund approval; Fund arrangements; Low-income developing countries; Members; Poverty Reduction and Growth Facility; Stand-by arrangement requests; balance of payments; current account balance; current account; terms of trade; commodity prices; debt service; non-oil commodity; non-oil commodity prices; debt service to exports; oil prices; world trade; terms of trade shocks; trade shocks; current account deficit; non-oil commodities; counterfactual simulations; external debt; net present value of debt; black market premium; long-term debt; debt burden; multilateral creditors; short-term debt; debt rescheduling; debt outstanding; external debt service; foreign aid; debt relief; oil imports; oil shock; exogenous shock; global liquidity; per capita income; external borrowing; debt crisis; external financing; current account surplus; external finance; official creditors; trade shock; credit tranche; oil importers; reserve holdings; debt servicing; political economy; investment flows; external shock; exchange rate regime; debt sustainability; government deficit; imf repurchases; current account balances; current account deficits; debt relief initiative; repurchases; export earnings; multilateral debt; public and publicly guaranteed debt; public external debt; import costs; transition economies; external debt sustainability; multilateral agencies; repayment ability; external debt burdens; crisis countries; debt stock; credit tranches; balance of payments crisis; global shocks; public and publicly guaranteed; value of imports; debt servicing capacity; price of imports; trade losses; trade growth; external debt burden; member country; multilateral debt relief; exporting countries; export growth; debt burdens;

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Gian Maria Milesi-Ferrett & Assaf Razin, 1996. "Current Account Sustainability: Selected East Asian and Latin American Experiences," NBER Working Papers 5791, National Bureau of Economic Research, Inc.
    2. Graham Bird, . "The IMF: A Bird's Eye View of its Role and Operations," School of Economics Discussion Papers 0407, School of Economics, University of Surrey, revised Jan 2007.
    3. Knight, Malcolm & Santaella, Julio A., 1997. "Economic determinants of IMF financial arrangements," Journal of Development Economics, Elsevier, vol. 54(2), pages 405-436, December.
    4. Chamberlain, Gary, 1982. "Multivariate regression models for panel data," Journal of Econometrics, Elsevier, vol. 18(1), pages 5-46, January.
    5. Graham Bird & Dane Rowlands, 2001. "IMF lending: how is it affected by economic, political and institutional factors?," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 4(3), pages 243-270.
    6. Carmen M. Reinhart & Kenneth S. Rogoff, 2004. "The Modern History of Exchange Rate Arrangements: A Reinterpretation," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 1-48, February.
    7. Helge Berger & Jakob de Haan & Jan-Egbert Sturm, 2005. "Which Variables Explain Decisions on IMF Credit? An Extreme Bounds Analysis ," TWI Research Paper Series 13, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    8. Graham Bird & Dane Rowlands, 2005. "Should It Be Curtains for Some of the IMF’s Lending Windows?," School of Economics Discussion Papers 0905, School of Economics, University of Surrey.
    9. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
    10. Conway, Patrick, 1994. "IMF lending programs: Participation and impact," Journal of Development Economics, Elsevier, vol. 45(2), pages 365-391, December.
    11. Bird, Graham & Hussain, Mumtaz & Joyce, Joseph P., 2004. "Many happy returns? Recidivism and the IMF," Journal of International Money and Finance, Elsevier, vol. 23(2), pages 231-251, March.
    12. Robert J. Barro & Jong-Wha Lee, 2002. "IMF Programs: Who is Chosen and What Are the Effects?," NBER Working Papers 8951, National Bureau of Economic Research, Inc.
    13. Axel Dreher & Nathan Jensen, 2005. "Independent Actor or Agent? An Empirical Analysis of the impact of US interests on IMF Conditions," KOF Working papers 05-118, KOF Swiss Economic Institute, ETH Zurich.
    14. Laura Jaramillo & Cemile Sancak, 2009. "Why Has the Grass Been Greener on One Side of Hispaniola? A Comparative Growth Analysis of the Dominican Republic and Haiti," IMF Staff Papers, Palgrave Macmillan, vol. 56(2), pages 323-349, June.
    15. Beck, Thorsten & Clarke, George & Groff, Alberto & Keefer, Philip & Walsh, Patrick, 2000. "New tools and new tests in comparative political economy - the database of political institutions," Policy Research Working Paper Series 2283, The World Bank.
    16. Hutchison, Michael M. & Noy, Ilan, 2003. "Macroeconomic effects of IMF-sponsored programs in Latin America: output costs, program recidivism and the vicious cycle of failed stabilizations," Journal of International Money and Finance, Elsevier, vol. 22(7), pages 991-1014, December.
    17. Przeworski, Adam & Vreeland, James Raymond, 2000. "The effect of IMF programs on economic growth," Journal of Development Economics, Elsevier, vol. 62(2), pages 385-421, August.
    18. Axel Dreher & Jan-Egbert Sturm & James Raymond Vreeland, 2006. "Does Membership on the UN Security Council Influence IMF Decisions? Evidence from Panel Data," CESifo Working Paper Series 1808, CESifo Group Munich.
    19. Colin Cameron, A. & Windmeijer, Frank A. G., 1997. "An R-squared measure of goodness of fit for some common nonlinear regression models," Journal of Econometrics, Elsevier, vol. 77(2), pages 329-342, April.
    20. Eugenio Cerutti, 2007. "Imf Drawing Programs," IMF Working Papers 07/152, International Monetary Fund.
    21. Alex Mourmouras & Anna Ivanova & George C. Anayotos & Wolfgang Mayer, 2003. "What Determines the Implementation of IMF-Supported Programs?," IMF Working Papers 03/8, International Monetary Fund.
    22. Julio A. Santaella, 1996. "Stylized Facts before IMF-Supported Macroeconomic Adjustment," IMF Staff Papers, Palgrave Macmillan, vol. 43(3), pages 502-544, September.
    23. Joyce, Joseph P., 1992. "The economic characteristics of IMF program countries," Economics Letters, Elsevier, vol. 38(2), pages 237-242, February.
    24. John R. Hauser, 1977. "Testing the Accuracy," Discussion Papers 286, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    25. Atish Ghosh & Manuela Goretti & Bikas Joshi & Alun Thomas & Juan Zalduendo, 2008. "Modeling Aggregate Use of IMF Resources—Analytical Approaches and Medium-Term Projections," IMF Staff Papers, Palgrave Macmillan, vol. 55(1), pages 1-49, April.
    26. Graham Bird & Dane Rowlands, 2009. "A disaggregated empirical analysis of the determinants of IMF arrangements: Does one model fit all?," Journal of International Development, John Wiley & Sons, Ltd., vol. 21(7), pages 915-931.
    27. Fischer, Stanley, 1993. "The role of macroeconomic factors in growth," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 485-512, December.
    28. Joseph P. Joyce, 2001. "Time present and time past: a duration analysis of IMF program spells," Working Papers 01-2, Federal Reserve Bank of Boston.
    29. Selim Elekdag, 2006. "How Does the Global Economic Environment Influence the Demand for IMF Resources," IMF Working Papers 06/239, International Monetary Fund.
    30. Atish R. Ghosh & Juan Zalduendo & Manuela Goretti & Bikas Joshi & Alun H. Thomas, 2007. "Modeling Aggregate Use of Fund Resources," IMF Working Papers 07/70, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Christoph Moser & Jan-Egbert Sturm, 2011. "Explaining IMF lending decisions after the Cold War," The Review of International Organizations, Springer, vol. 6(3), pages 307-340, September.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:09/263. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow) or (Hassan Zaidi).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.