Currency Devaluation or Depreciation might be helpful in outward paying economies that have an export-led model of growth.
Economies where the majority of the derived demand is based on domestic commercial activity, might find currency price reduction as a harrowing systemic risk
Economies where the majority of the derived demand is based on domestic commercial activity, might find currency price reduction as a harrowing systemic risk
The first thing that an IMF Program desires from its client states is that they should devalue or assist market-based depreciation of their nominal exchange rate.
In this way, the economy can instil a shock by means of which macroeconomic adjustment will take place!
Reducing CAD
In this way, the economy can instil a shock by means of which macroeconomic adjustment will take place!
Reducing CAD
All client states that borrow to finance the balance of payments gap, working under the IMF Program, lose their economic sovereignty and turn into satellite states.
The International Political Economy of the IMF Structural Adjustment Program needs understanding.
These are tools
The International Political Economy of the IMF Structural Adjustment Program needs understanding.
These are tools
IMF will not lend money without the permission of Major Foreign Powers, especially Uncle Sam
Not only do the big powers dominate such Bretton Wood Institutions, but they also choose to bring countries to fall in line with the global political and economic agenda of the big powers
Not only do the big powers dominate such Bretton Wood Institutions, but they also choose to bring countries to fall in line with the global political and economic agenda of the big powers
Still, dont understand why nations that have repeatedly failed to implement the IMF Economic Program in letter and spirit get another chance?
What is the meaning of this?
It is like a borrower getting a constant debt rollover lolly pop from the bank!
Politics of the World Economy
What is the meaning of this?
It is like a borrower getting a constant debt rollover lolly pop from the bank!
Politics of the World Economy
Well, most of the nations that keep borrowing from the IMF under various schemes have relinquished their right to suzerainty to the big capitalist economies.
The same mantra was offered to Malaysia, but, @chedetofficial rightly rejected their prescriptions during the Asian Crisis
The same mantra was offered to Malaysia, but, @chedetofficial rightly rejected their prescriptions during the Asian Crisis
Dr M did not allow the Malaysian Ringgit to free float.
Most economists such as @paulkrugman and late Robert Mundell hurled vitriolic criticisms at Mahathir during the AFC Asian Financial Crisis.
But, they later admitted their mistakes.
Malaysia was the first to recover post AFC!
Most economists such as @paulkrugman and late Robert Mundell hurled vitriolic criticisms at Mahathir during the AFC Asian Financial Crisis.
But, they later admitted their mistakes.
Malaysia was the first to recover post AFC!
If you hand over your currency and interest rate, then what is left?
The central bank can only work as a printing machine, and a post box transferring orders to and fro the IMF.
Also, fiscal policy targets are set by the Fund, which further strangulates the domestic demand.
The central bank can only work as a printing machine, and a post box transferring orders to and fro the IMF.
Also, fiscal policy targets are set by the Fund, which further strangulates the domestic demand.
A lot of studies in Development and Transition Economics have been published by various Independent Economists.
Most of the studies show that IMF #ESAF - Enhanced Structural Adjustment Programs have led to deindustrialization across many developing nations.
Notably across Africa.
Most of the studies show that IMF #ESAF - Enhanced Structural Adjustment Programs have led to deindustrialization across many developing nations.
Notably across Africa.
Speedy removal of tariffs, cutting off subsidies, slashing of development expenditure such as poverty alleviation programs to meet fiscal targets such as budget deficit as a % of GDP, privatizing of SOEs,dismantling of price ceilings & restricting social welfare are IMF Hallmarks
Shock Therapy sounds good in books written by Chicago Boys.
IMF models work well in mathematical economics terms, but, in reality, they might damage the social and psychological characteristics of a populace and a nation beyond recognition.
IMF models work well in mathematical economics terms, but, in reality, they might damage the social and psychological characteristics of a populace and a nation beyond recognition.
@JosephEStiglitz was right when he lambasted the Fund during the AFC
Even a basic econs 101 student knows that a contractionary monetary and fiscal policy will wreak economic destruction on a nation
Raising short term interest rates and allowing the nominal exch rate to free fall
Even a basic econs 101 student knows that a contractionary monetary and fiscal policy will wreak economic destruction on a nation
Raising short term interest rates and allowing the nominal exch rate to free fall
President #Suharto lost power due to the IMF Package he took.
Still, remember how Indonesians were ransacking shops and private property as the value of Rupiah sank
Will never forget those anarchic and arsenic scenes.
The antidote provided by the fund worked to accentuate flames
Still, remember how Indonesians were ransacking shops and private property as the value of Rupiah sank
Will never forget those anarchic and arsenic scenes.
The antidote provided by the fund worked to accentuate flames
Yeah, #IMF Macroeconomic Model tends to tweak the economy using the J-Curve Assumptions.
This completely ignores the price elasticity of demand figures for exports and imports.
if exports are inelastic, #devaluation won't help!
Econs 101 which the fund refuses to ignore?
This completely ignores the price elasticity of demand figures for exports and imports.
if exports are inelastic, #devaluation won't help!
Econs 101 which the fund refuses to ignore?
Market determined interest rate, exch rate, commodity prices and wage rate might work well if the economy and agents can transfer financial and business risks.
In the absence of social safety nets and risk transference, price deregulation is akin to throwing sheep before the wolf
In the absence of social safety nets and risk transference, price deregulation is akin to throwing sheep before the wolf
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