After ten years the Russian crisis how IMF intervention might be evaluated?
AbstractThe ongoing global financial crisis has become prominently visible since September 2008. This crisis affected the whole world and enhanced the importance of policy implementation to mitigate financial crises in future. Many academics blamed insufficient domestic regulation as the reason of crises, others pointed to the lack of overseas financial regulation and inappropriate actions by international organizations, such as the IMF and World Bank. This whole discussion encouraged to look back and analyzed a previous crisis in smallest countries such as Russia. This paper evidently shows the inefficiency of IMF policy during the Russia Crisis in 1998 by implementing a new monetary balance-of-payment model in Russian data. This model identified the role of macroeconomic fundamentals and international economic policy implications on the likelihood and the timing of the currency crisis in Russia. For the period from December 1995 to December 1998 it was found that, the increase in domestic credit growth gradually undermined confidence in the fixed exchange rate regime. The most dangerous point was at the end of 1998, when the collapse probability was above 90 percent. This result ambiguously questioned the IMF’s July packet 1998 and proved the political aspects of this financial help.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 30930.
Date of creation: 29 Apr 2011
Date of revision:
currency crisis; financial liberalization; sudden-stops; monetary balance-of-payment model; Russian crisis; IMF’s policy;
Find related papers by JEL classification:
- F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-06-11 (All new papers)
- NEP-CIS-2011-06-11 (Confederation of Independent States)
- NEP-REG-2011-06-11 (Regulation)
- NEP-TRA-2011-06-11 (Transition Economics)
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