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

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  • Selim Elekdag

Abstract

The main objective of this paper is to quantify the relationship between the global economic environment and the number of Stand-By Arrangements (SBAs). 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 a SBA nearly doubles, implying an increase from about six 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 significantly increase the demand for IMF resources.

Suggested Citation

  • Selim Elekdag, 2006. "How Does the Global Economic Environment Influence the Demand for IMF Resources?," IMF Working Papers 06/239, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:06/239
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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.
    2. Oberdabernig, Doris A., 2013. "Revisiting the Effects of IMF Programs on Poverty and Inequality," World Development, Elsevier, vol. 46(C), pages 113-142.
    3. Yasemin Bal Gunduz, 2009. "Estimating Demand for IMF Financing by Low-Income Countries in Response to Shocks," IMF Working Papers 09/263, International Monetary Fund.
    4. Eugenio M Cerutti, 2007. "IMF Drawing Programs; Participation Determinants and Forecasting," IMF Working Papers 07/152, International Monetary Fund.

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