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Imf Policy Advice To Emerging Market Economies During The 2008–2009 Crisis: New Fund Or New Fundamentals?

Author

Listed:
  • ATISH R. GHOSH

    (IMF Research Department, USA)

  • CHRISTOPHER CROWE

    (IMF Research Department, USA)

  • JUN IL KIM

    (IMF Research Department, USA)

  • JONATHAN D. OSTRY

    (IMF Research Department, USA)

  • MARCOS CHAMON

    (IMF Research Department, USA)

Abstract

This paper reviews the International Monetary Fund (IMF) policy advice to emerging market economies (EMEs) during the 2008-09 crisis, contrasting it to previous crisis episodes. EMEs that had strong fundamentals, and were mainly affected through international trade and financial spillovers, were advised to loosen monetary and fiscal policies, much like the counter-cyclical policies pursued by advanced economies. But in EMEs with "home-grown" vulnerabilities, the advice was more traditional fiscal consolidation, monetary restraint and structural reform, albeit with more financing and greater emphasis on cushioning the impact of the shock. Thus, the "new" IMF advice was the result of "new fundamentals" in EMEs.

Suggested Citation

  • Atish R. Ghosh & Christopher Crowe & Jun Il Kim & Jonathan D. Ostry & Marcos Chamon, 2011. "Imf Policy Advice To Emerging Market Economies During The 2008–2009 Crisis: New Fund Or New Fundamentals?," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(01), pages 1-17.
    • Handle: RePEc:wsi:jicepx:v:02:y:2011:i:01:n:s1793993311000191
    DOI: 10.1142/S1793993311000191
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    References listed on IDEAS

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    1. Antonio Spilimbergo & Steve Symansky & Olivier Blanchard & Carlo Cottarelli, 2009. "Fiscal Policy For The Crisis," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 10(02), pages 26-32, July.
    2. Antonio Spilimbergo & Steve Symansky & Olivier Blanchard & Carlo Cottarelli, 2009. "Fiscal Policy For The Crisis," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 10(02), pages 26-32, July.
    3. Guillermo A. Calvo, 2006. "Monetary Policy Challenges in Emerging Markets: Sudden Stop, Liability Dollarization, and Lender of Last Resort," Research Department Publications 4504, Inter-American Development Bank, Research Department.
    4. Ales Bulir & Marianne Schulze-Gattas & Atish R. Ghosh & Alex Mourmouras & A. J Hamann & Timothy D. Lane, 2002. "IMF-Supported Programs in Capital Account Crises; Design and Experience," IMF Occasional Papers 2002/002, International Monetary Fund.
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    More about this item

    Keywords

    Emerging market crises; IMF policy; IMF supported programs; global financial crisis; E60; F30; F33;
    All these keywords.

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • F30 - International Economics - - International Finance - - - General
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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