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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...
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This note was uploaded on 02/26/2008 for the course PSCI 2012 taught by Professor Davidbrown during the Fall '07 term at Colorado.
- Fall '07
- Comparative Politics