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How Does the Global Economic Environment Influence the Demand for IMF Resources?

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  • Selim Elekdağ

Abstract

The main objective of this paper is to quantify the relationship between the global economic environment and Stand-By Arrangements (SBAs) with the IMF. The results suggest that oil prices, world interest rates, and the global business cycle are the most influential indicators that affect the number of SBAs being requested. In addition, the empirical model seems to have reasonable accuracy when predicting SBAs. Furthermore, when oil prices, interest rates, and the global business cycle are adversely shocked by one standard deviation, the conditional probability of an SBA nearly doubles, implying an increase from about 6 to 12 SBAs. More critically, the model suggests that even a steady deterioration of the global economic climate would imply increasingly harsher conditions for developing and emerging market countries, which may in turn increase the demand for IMF resources significantly. IMF Staff Papers (2008) 55, 624–653. doi:10.1057/imfsp.2008.4; published online 17 June 2008

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  • Selim Elekdağ, 2008. "How Does the Global Economic Environment Influence the Demand for IMF Resources?," IMF Staff Papers, Palgrave Macmillan, vol. 55(4), pages 624-653, December.
  • Handle: RePEc:pal:imfstp:v:55:y:2008:i:4:p:624-653
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    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.

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