Economic and Financial Crises in Emerging Market Economies

Feldstein, Martin

doi:10.7208/chicago/9780226241104.001.0001

Cited by 58 publications

(16 citation statements)

References 6 publications

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“…See Arteta et al (2001) for a cost/benefit study of financial opening. For studies dealing with the financial instability associated with capital account opening see the papers in Edwards and Frankel (2002) and Feldstein (2003), andAizenman (2004) for an overview of the challenges associated with financial opening.…”

Section: Introduction and Overviewmentioning

confidence: 99%

On the hidden links between financial and trade opening

Aizenman

2008

Journal of International Money and Finance

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Developing countries characterized by high costs of tax collection and enforcement opt to use financial repression as an implicit tax on savings, providing the impetus for capital flight. A mechanism facilitating illicit capital movements is trade misinvoicing, where the effectiveness of capital controls would increase with the resources spent on monitoring and enforcement per one dollar of international trade. Under these circumstances, greater trade openness increases the effective cost of enforcing financial repression, thereby reducing the usefulness of financial repression as an implicit tax. This in turn implies that financial reforms tend to be the by-product of greater trade integration.

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Section: Introduction and Overviewmentioning

confidence: 99%

On the hidden links between financial and trade opening

Aizenman

2008

Journal of International Money and Finance

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“…One view holds that some of the structural reform measures were unrelated to the immediate problem of crisis resolution and distracted attention from the core macroeconomic and financial issues; and they were felt to be an encroachment into domestic decision making, creating an unnecessary opposition, and may have damaged investor confidence by signaling to the markets that the situation was worse than they had feared (Feldstein, 1998;Radelet & Sachs 1998). The other view argues that restoring market confidence requires the demonstration of a will to tackle the structural causes of crisis vulnerabilities in the economy (Goldstein 2002;Summers, 1999). The issue will never be fully resolved, although the balance of opinion has shifted to the former view, especially within the IMF.…”

Section: Structural Conditionalitymentioning

confidence: 99%

Applying the Lessons of Asia: The IMF's Crisis Management Strategy following the Global Financial Crisis

Takagi

2016

International Economic Journal

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The paper reviews the International Monetary Fund's (IMF's) nonconcessional lending programs following the global financial crisis, with a view to understanding how the IMF applied the lessons of the Asian crisis in designing its approach to crisis management. For this purpose, the paper focuses on the 2008 programs in Hungary, Iceland, Latvia and Ukraine -the first of its kind since the early 2000s -and compares them with the 1997 programs in Indonesia, Korea and Thailand. Our analysis finds the European programs better funded and their structural conditionality more focused. Other than these, the overall thrust of the programs was similar: fiscal and monetary tightening, coupled with banking reforms. The real difference was not so much about content but about philosophy. Relative to the Asian programs, the European programs were characterized by more emphasis on ownership, greater collaboration among stakeholders, more realistic assumptions and greater transparency about the risks and the logic of policy actions, and more built-in flexibility of targets and policy options. This approach to crisis management incorporated the changes that had been made since the Asian crisis in the IMF's policies and procedures to manage capital account crises more effectively. ARTICLE HISTORY

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“…Killick (1995) found that program completion rates were positively linked to the amount of credit committed relative to a country's current account deficit. Bird (2001b) and Goldstein (2003) have both suggested that the decline in compliance over time may be inversely linked to the increase in the number of conditions, particularly structural. The IMF (2001b), however, has disputed the existence of a link between the number of measures included in a program and the rate of implementation.…”

Section: Empirical Analyses Of Program Compliancementioning

confidence: 99%

“…The disbursement of funds to the governments that enroll in these programs is linked through a procedure known as ''conditionality'' to their implementation of policies specified in advance. The scope and nature of these policies have expanded in recent years, and analysts such as Goldstein (2003) have examined the consequences of this extension.…”

Section: Introductionmentioning

confidence: 99%

Promises Made, Promises Broken: A Model of IMF Program Implementation

Joyce

2003

SSRN Journal

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This paper presents a model of the implementation of IMF programs, which is empirically tested with data from the period 1975-1999. The IMF and the borrowing country are shown to have asymmetric evaluations of a program's discounted benefits, due to differences in the measurement of the benefits, the relevant time frame and appropriate discount rate. The model also distinguishes between a government that seeks to maximize national welfare and an autocracy that seeks only to benefit the ruling group. The results of the empirical analysis demonstrate that program implementation is affected by a country's trade openness, the ideological cohesion of the government, the duration of the political regime, and the degree of political openness.Promises and pie-crust are made to be broken.

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Economic and Financial Crises in Emerging Market Economies

Cited by 58 publications

References 6 publications

On the hidden links between financial and trade opening

On the hidden links between financial and trade opening

Applying the Lessons of Asia: The IMF's Crisis Management Strategy following the Global Financial Crisis

Promises Made, Promises Broken: A Model of IMF Program Implementation

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