This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: Why go along with the IMF? Process Country in severe need of help go to IMF Agreement that with lending, country must right financial situation Why IMF? Reputation (Signaling Device) Negative incentives Banks can make it difficult to carry out business Seizure of national assets Cut debtor off from trade credits Domestic Demand Restraint (stabilization) Restrict credit Interest Rates Rise Cut government expenditures Raise taxes Exchange rate devaluation Price liberalization Discourage imports / encourage exports...
View Full Document
- Fall '07
- Comparative Politics