The IMF and precautionary lending: An empirical evaluation of the selectivity and effectiveness of the Flexible Credit Line

Essers, Dennis; Ide, Stefaan

doi:10.1016/j.jimonfin.2018.12.007

Cited by 16 publications

(10 citation statements)

References 107 publications

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“…The fact that both the dummy variable and the volume variable are statistically significant could be an indication that both factors matter. Nonetheless, the results from this study support the findings of Essers and Ide (2019) and suggest that the perceived stigma surrounding precautionary IMF facilities -and the FCL in particular -appears unwarranted.…”

Section: Resultssupporting

confidence: 77%

The Impact of the Global Financial Safety Net on Emerging Market Bond Spreads

Kilp¹,

Anvari²,

Springfield³

et al. 2019

RJMF

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Following the 2007-2008 global financial crisis, it became evident that there was a need for a strengthening of the global financial safety net (GFSN). The manner in which this should be achieved became a polarising issue of debate in international institutions such as the International Monetary Fund and the G20. Empirical evidence concerning the impact of the GFSN remains scarce. Therefore, this paper seeks to contribute to the debate by investigating the potential impacts that the various layers of the GFSN can have on sovereign borrowing costs in emerging markets. This analysis first reviews the common methodologies that can be found in the literature concerned with identifying determinants of foreign currency sovereign spreads in emerging markets. The analysis is then expanded to include elements of the GFSN. The results indicate that whilst the liquidity buffers provided by the overall GFSN appear to lower sovereign spreads, the impact of individual layers of the safety net is more ambiguous.

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Section: Resultssupporting

confidence: 77%

The Impact of the Global Financial Safety Net on Emerging Market Bond Spreads

Kilp¹,

Anvari²,

Springfield³

et al. 2019

RJMF

View full text Add to dashboard Cite

show abstract

“…This method has been used by the same authors to evaluate the economic impact of the 1990 German reunification on West Germany (Abadie et al, 2015). Essers and Ide (2019) uses the same method to evaluate the effects of the IMF flexible credit line arrangements on Mexican, Colombian and Polish external financing costs and capital inflows.…”

Section: Methodsmentioning

confidence: 99%

“…This index ranges within [0,U] indicating that the RMSPE is obtained when the treated and the synthetic unit is (U x 100)% on each pretreatment year (Adhikari and Alm, 2016;Essers and Ide, 2019). The fit is deemed perfect if the fit index is 0, i.e.…”

Section: Methodsmentioning

confidence: 99%

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Does Access to International Capital Markets Affect Investment Dynamics in Sub-Saharan Africa?

Senga

Cassimon

Kigabo

2020

Journal of African Business

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This study investigates the influence of government borrowing through international capital markets on investment dynamics in Sub-Saharan Africa (SSA). We apply the synthetic control method to Gabon, Ghana and Senegal to assess whether this kind of government borrowing affects private, public and FDI in these countries using annual data for the period 1995-2017. Our results suggest that government and private investment have not been affected by governments' borrowing through international capital markets, but that the move may have boosted these countries' capacity to attract foreign direct investment. They lend support to the hypothesis that these countries' exposure to international capital markets is an opportunity to register on the investors' radar.

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“…Ndiaye ( 2020 ) uses the SCM to evaluate how joining the CFA-franc zone in 1997 affected growth in Guinea-Bissau, while Chamon et al ( 2017 ) use the technique to evaluate the effects of a sterilized foreign exchange intervention on exchange rate volatility in Brazil. The SCM has also been used to evaluate the effectiveness of very specific IMF programs (Essers and Ide 2019 ; Newiak and Willems 2017 ). There are no studies to our knowledge, however, that leverage the advantages of a synthetic control method to evaluate the effectiveness of currency devaluations on growth, supported by the IMF or otherwise.…”

Section: Related Literaturementioning

confidence: 99%

Currency Devaluation as a Source of Growth in Africa: A Synthetic Control Approach

2022

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This study examines the impact of the 1994 IMF-supported CFA franc devaluation on GDP per capita in the CFA-franc zone using the augmented synthetic control methodology. With the exception of Mali, there is no statistical evidence that GDP per capita levels rose relative to what they would have been in the absence of the IMF-supported devaluation. Three countries record statistically significant GDP per capita levels below the counterfactual following the devaluation, though these countries experienced a deterioration of their national institutional environment or were affected by external factors that offset any potential gains from the devaluation.

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The IMF and precautionary lending: An empirical evaluation of the selectivity and effectiveness of the Flexible Credit Line

Cited by 16 publications

References 107 publications

The Impact of the Global Financial Safety Net on Emerging Market Bond Spreads

The Impact of the Global Financial Safety Net on Emerging Market Bond Spreads

Does Access to International Capital Markets Affect Investment Dynamics in Sub-Saharan Africa?

Currency Devaluation as a Source of Growth in Africa: A Synthetic Control Approach

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