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Evaluating the Macroeconomic Impact of IMF Programs in Sudan

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  • Muayad Ismail

    (Department of Economics, University of Reading)

Abstract

This paper applies a combination of quantitative techniques, namely the Generalized Evaluation Estimator (GEE) and Synthetic Control Method (SCM), to assess the impact of IMF programs implemented in Sudan on the performance of real GDP growth, inflation, and the current account balance. The two applied methods provide empirical evidence that IMF programs in Sudan were effective in reducing inflation during program periods, albeit with short-lived effects thereafter. However, conclusions drawn by the two approaches are divergent regarding the effects of IMF programs on GDP growth and the current account balance. While the GEE approach fails to detect any significant effects of Fund programs on growth and the current account balance for the entire sample period, the SCM concludes that the effects on growth (current account) have been positive (negative). Further, the GEE approach finds positive and significant effects of IMF programs on GDP growth when the analysis is restricted to cover IMF Staff Monitored Program (SMP) periods only. Notwithstanding these positive effects, the analysis indicates that deliberately keeping inflation rates very low during SMP program periods could have possibly constrained higher rates of GDP growth during the same periods.

Suggested Citation

  • Muayad Ismail, 2020. "Evaluating the Macroeconomic Impact of IMF Programs in Sudan," Economics Discussion Papers em-dp2020-21, Department of Economics, University of Reading.
  • Handle: RePEc:rdg:emxxdp:em-dp2020-21
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    File URL: http://www.reading.ac.uk/web/FILES/economics/emdp202021.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    IMF Programs; Generalized Evaluation Estimator; Synthetic Control; Stand-By Arrangements; Staff Monitored Programs;
    All these keywords.

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes

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