MACROECONOMIC PERFORMANCE AND ADJUSTMENT UNDER POLICIES COMMONLY SUPPORTED BY THE INTERNATIONAL MONETARY FUND

In the past the IMF stabilization programs were basically demand side. In recent years the IMF has recognized the importance of supply factors, and thus adjustment programs include policy tools that deal with production bottlenecks, ways to improve resource utilization, and so forth. This article examines directly the effects that a typical stabilization program may have on three important macroeconomic variables: the growth rate in real output (economic growth), the inflation rate, and the current account balance. The effects of such programs are illustrated through regression analysis. Three models that examine the relationship between relevant macroeconomic variables and the IMF's instrumental tools are introduced. The analysis covers 43 countries, of which 27 are program countries that used IMF financial resources during 1977. Nineteen seventy seven is used as a base period for this study. The economic impact of these loans over the next 6 yr is examined. Data limitation on some of these developing countries does not allow study beyond 1983. The data are composed of time-series cross-sectional observations. -from Author