Nobody downloaded yet

The IMFs Approach to Economic Stabilization - Essay Example

Comments (0) Cite this document
Economic stabilization in developing countries primarily concerns attempts to correct excessive or unsustainable balance-of-payments deficits, reduce the rate of domestic inflation, or both. "Frequently, stabilization efforts also involved exchange rate reform and changes in the systems of import protection and export incentives…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER96.7% of users find it useful
The IMFs Approach to Economic Stabilization
Read TextPreview

Extract of sample "The IMFs Approach to Economic Stabilization"

Download file to see previous pages In order to truly diagnose the situation, and properly understand the IMF and its current position in the world, we must ask the following questions:
Founded in the turbulent era of the 1940s to stabilize the world economy, and based in Washington, D.C., the IMF (International Monetary Fund) is "an organization of 184 countries, working to foster global monetary cooperation, secure financial security, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty." ("IMF", 2006). The IMF's original purpose was "to establish a code of conduct that would enhance economic cooperation, and avoid the 'beggar-thy-neighbor' policies that led to the economic turbulence of the thirties." (Babb & Buira, 2005). In short, the IMF is a multilateral institution that lends money to governments in order to stabilize currencies and maintain order in international markets. Since the IMF was established its purposes have remained unchanged, but its surveillance, financial assistance and technical assistance operations have developed regularly in order to "meet the changing needs of its member countries in an evolving world economy." ("IMF", 2006). The IMF "plays a key role in defining how much governments can spendThe Fund's view of what defines the macro economic stability of a country is the authoritative one for all development partners." ("Eurodad", 2003).
What are the Main Components of the IMF's Approach to Economic Stabilization
Particularly so in recent years, the IMF's quantitative approach to economic stabilization "has been the subject of considerable controversy." ("Survey", 1999). Considered as "the creator of the 'moral hazard'," (Monsod, 1998), the IMF consists of many programs which are often characterized as being "unnecessarily damaging to growth, harmful to the poor, unduly inflexible and unresponsive to the differing needs and circumstances of member countries, and based on rigid application of outmoded and discredited economic principles." (Mussa & Savastano, 1999).
In order to understand the IMF's approach to economic stabilization and how it functions in all aspects, one must first understand the process of an IMF supported program: typically an IMF supported program is not permanent or 'set in stone' at the beginning of operations, but rather begins with the seemingly simple a request of a member. It is only then that the IMF staff prepares a blueprint of a program that is used for the actual basis of negotiations. After this, when an agreement is reached, the arrangement is cleared by IMF management and then approved by the IMF Executive Board. Disbursements proceed immediately after this if all performance ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“The IMFs Approach to Economic Stabilization Essay”, n.d.)
The IMFs Approach to Economic Stabilization Essay. Retrieved from
(The IMFs Approach to Economic Stabilization Essay)
The IMFs Approach to Economic Stabilization Essay.
“The IMFs Approach to Economic Stabilization Essay”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF The IMFs Approach to Economic Stabilization

Tourism Planning within Europe: Economic Approach to the Development

...? TOURISM PLANNING WITHIN EUROPE IS STILL DOMINATED BY AN ESSENTIALITY 'ECONOMIC' APPROACH TO DEVELOPMENT. INTRODUCTION When people hear of the term Tourism, they immediately picture other individuals moving from one place to another either locally or internationally for the sole purpose of leisure. Tourism refers to that set of activities, industries and services that tend to deliver a travel experience to people and/or groups of individuals travelling from their place of residence for the purpose of pleasure (Gunn & Var, 2002, p.12). Tourism has a number of benefits to a country for instance it enhances social relations between the host and the visiting individuals where the tourist is viewed to be a...
7 Pages(1750 words)Essay

LR growth, Economic Fluctuations, US Stabilization Policy

...LR growth Robert Solow is one of the neo ical economists who believed that growth of output leads to economic growth and economic development. According to the Solow model, growth output is dependent on increase in the factors of production and mostly increase in the labor quality and quantity. In addition, increased capital which is dependent on savings and investment also leads to increased growth in output as proposed by this theory. In this theory it is assumed that technology is constant across countries. Improvements in technology also attribute to the growth of output, thus economic growth development. Differences in the rate of technological advancement can be attributed to the...
6 Pages(1500 words)Term Paper

Normative approach and positive approach

...from the historical methods, so the adoption of this method may create several social and economic problems. As the people are using the historical methods for decades, so to make them understand about the strength and weakness of this method may charge a huge cost. A question can arise due to the relevancy of an asset’s price, when the entity does not want to sell that asset. Positive Approach Positive approach of accounting theory is mostly concerned with the methods focused on how the world works. According to Scott PAT (Positive Accounting Theory), this is the method which helps to predict the actions of the accounting policies managed by the firm managers and their response to the...
8 Pages(2000 words)Essay

Nussbaums Approach, the Capabilities Approach

..., social, and economic among nations (Alexander p. 17). Citizenship promotes the advancement of human culture through which permit programs such as language exchanges and cultural exhibitions to enhance our understanding of the variety of people worldwide. The stability of power should be strongly institutionalized with public policy decision making where the citizens are able to participate in the affairs of the country. The stability in a country is dependent of the political culture that encourages collaborative governance while discouraging the rapid policy shifts. This approach has led to the adoption of these values and philosophies in other nations. It is a...
7 Pages(1750 words)Essay

Economic approach to explain the existence of prostitution

...? Use the Economic Approach to Explain the Existence of Prostitution al: Prostitution from the buyer’s point of viewis cheaper compared to a long term courtship leading to marriage. It is a venture that allows the buyer to save on numerous expenses that may arise in terms of the pleasantries given to a girlfriend. In essence, the cost of maintaining a wife when compared with prostitution, is more expensive. While, a wife will require your attention on a daily basis in terms providing for her upkeep, a prostitute only require payment for the services rendered and which, does not occur on a daily basis. As a result, the opportunity cost of forsaking a wife or a girlfriend for a prostitute is that, an...
3 Pages(750 words)Essay

Decision Usefulness approach vs. Measurement Approach

...Decision Usefulness approach vs. Measurement Approach Table of Contents Decision Useful Approach 3 The Single-Pearson Theory 3 The Rational Investor 4 The principal of portfolio Diversification 5 The Optimal Portfolio Investment 5 Portfolio Risk 6 Measurement Approach 7 Reasons for Market Response 7 Market Efficiency of Securities 8 Ohlson’s Clean Surplus Theory 9 Auditors’ legal liability 9 Asymmetry of investor Losses  9 Role of Financial Accounting on both Approaches 10 Works Cited 11 Decision Useful Approach This approach motivates the application of decision models. The approach is based on the concept that if financial statements cannot be prepared correctly, then financial statements must be presented in such a manner so... as to...
6 Pages(1500 words)Research Paper

Business Stabilization the UK today are the Conservative and Labour parties, each having their traditional viewpoint on economic policies and how the Government is expected to intervene in the economy. However, in the post war period, there has been cross-party consensus as regards economic policy with very great inclination of both the left and the right towards Keynesianism. There has equally been much talk from both sides on how best to manipulate the financial operations of the Government with a view to furthering certain economic policy objectives. These objectives include price stability, external equilibrium, economic development and growth, income distribution etc....
4 Pages(1000 words)Essay

Keynesian Stabilization Policy economic activity. Unlike Keynes, Friedman believed that it was not possible for monetary or fiscal policy to control for full employment. His approach was to provide predictability and stability in the monetary supply, allowing the free market to assure increases in productivity, and subsequently in employment. Neo-Keynesian Theory Samuelson and others did not subscribe to Friedman's model of small government and stability in prices. Samuelson and the MIT School favored more interventionist policies, free trade, and government provision of a tax structure which supported income distribution in order to obviate the more egregious faults of "raw" capitalism. ...
7 Pages(1750 words)Essay

Stabilization Wedges Game

...Stabilization Wedges Game Memo Veema HERBAL HEALTHCARE Date: 19/04/2012 To: Group Members From: The Group Representative Subject: Stabilization Wedges Game: Offering Carbon Cutting solutions to the constant threat, arising from carbon dioxide Emission 2005(7)2055 List of the carbon cutting strategies selected for this study 1. Wind electricity – which displaces coal-based production of electricity (30 X current capacity) 2. Solar Energy (electricity) production – it reduces coal-based production of electricity (700 X Current capacity) 3. Efficiency-electricity – increases the efficiency of power generation 4. Efficiency transport – Increasing automobile fuel efficiency 5. Nuclear... , there is...
8 Pages(2000 words)Assignment

Project Keep Placement Stabilization

... Topic: “Project Keep” Placement Stabilization This intervention addresses the problem of child abuse due to prenatal exposure to alcohol which put the child at risk. It is not taken lightly when it comes to the issue of child abuse and neglect and at every level it is considered as a serious social issue. In the year 2002, daily average of children found to be victims of child abuse and neglect were found to be around 2,454 in number. Another discovery was made that same year that 532,000 children lived in foster homes. This was due to the fact that could not find comfort in their homes. This is one major social problem the child encounter as a result of abuse or neglect from drug addicted parents. Due to the nature of...
11 Pages(2750 words)Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic The IMFs Approach to Economic Stabilization for FREE!

Contact Us