Devaluation: A Critical Appraisal of IMF’s Policy Prescriptions

摘要: It is by now well understood that the use of extended facility Fund or approval for standby loans involve undertaking comprehensive programs adjustment "include policies... required to correct structural imbalances... ." Even after Fund's internal review its guidelines on conditionality in March 1979, agreements almost always requires severe tightening expenditures through contractionary fiscal and monetary policy measures such as imposition ceilings net government borrowing and/or domestic assets central bank, an upward nominal interest rates those cases where are fixed government. Approval also involves " understanding" with exchange rate arrangements. The understanding usually includes a substantial devaluation currency. Devaluation thus becomes part restrictive package which aims at improving balance payments country foreign reserve position. advocacy same short-run demand-oriented different countries times has created belief underlying prescriptions there exists uniform IMF line thought and, more importantly our purposes here, consistent analytical model. A cursory recent documents mission reports, however, reveals often based arguments, some justified not, cast doubt widespread acceptance within particular theoretical structure guideline policy. Thus 1982, advances macroeconomics international finance have empirical if not validity simplistic approach payments, arguments used sustain traditional become necessity murkier cumbersome. This nowhere clear than analysis focus this short paper. active tool critically analyzed following terms effectiveness stabilization substitute tax redistribution