...International Monetary Fund | A paper for the course Contemporary Global System | Rexis Jun M. Maamo | Introduction The international monetary system (IMS) had undergone several evolutions ever since international trade relations between states rose to prominence. Realizing the importance of trade relations and interdependence, the international community had established a number of international monetary systems throughout the history, in order to provide formal (rules and decision-making processes) and informal (principles and norms) institutions that acts as venues and sites to offer convenient transactions between states, and to address and prevent the reoccurrence of global financial issues and crises that are concurrently relative to the existing international monetary system. So far, there are about four international monetary systems that have been established and adopted consecutively: the Classical Gold Standard, the Gold Exchange Standard, the Bretton Woods System, and the Floating Exchange Rate System. The current monetary system espoused by the international community is the Floating Exchange Rate system which is accompanied by its formal institution, the IMF or the International Monetary Fund. The International Monetary Fund aims to promote global monetary and exchange stability, facilitate the expansion and balanced growth of international trade, and assist in the establishment of a multilateral system of payments for current transactions (Investopedia...
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...------------------------------------------------- INTERNATIONAL MONATERY FUND ------------------------------------------------- ------------------------------------------------- IMF FUNCTIONS it works to foster global growth and economic stability by providing policy, advice and financing to members, by working with developing nations to help them achieve macroeconomic stability and reduce poverty The rationale for this is that private international capital markets function imperfectly and many countries have limited access to financial markets. Such market imperfections, together with balance-of-payments financing, provide the justification for official financing, without which many countries could only correct large external payment imbalances through measures with adverse economic consequences.The IMF provides alternate sources of financing. Upon the founding of the IMF, its three primary functions were: to oversee the fixed exchange rate arrangements between countries,thus helping national governments manage their exchange rates and allowing these governments to prioritise economic growth, and to provide short-term capital to aid balance of payments. This assistance was meant to prevent the spread of international economic crises. The IMF was also intended to help mend the pieces of the international economy after the Great Depressionand World War II. As well, to provide capital investments for economic growth and projects such as infrastructure. The IMF's role was...
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...Introduction The International Monetary Fund (IMF) is mainly known as the global association that provides financing to member countries which are either developing countries that are in extreme poverty or countries that are faced with severe economic crisis who are no longer able to seek financing from other sources. Along with these loans, training and technical assistance on bettering economic management is offered. The IMF also provides policy advice to governments and central banks based on analysis of economic trends and cross-country experiences as well as research, statistics, forecasts, and analysis based on tracking of global, regional, and individual economies and markets. (About the IMF, n.d.) Currently there are 188 member countries of the IMF which makes the organization extremely important to virtually the whole world. Upon its creation at the Bretton Woods Conference there were 29 member countries who signed the Articles of Agreement in 1945. Between its creation and present day the IMF has helped countries deal with economic crises, and funded growth for many poverty stricken countries. As the IMF has grown into a major global economic body the role of the IMF has shifted from its first purpose of ensuring currency exchange rate stabilization and overseeing of the international monetary system to a major global lending organization and global economic stabilization force. (About IMF, n.d.) “Two years ago the world’s main international economic institution...
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...International Monetary Fund The International Monetary Fund was established, along with the World Bank, at a conference in Bretton Woods, New Hampshire, USA, in July 1944, the closing stages of World War II. The participants represented 44 countries including the countries which were soon to win the war against fascism. They were concerned about the rebuilding of Europe and of the global economic system after a devastating war and enhance economic cooperation that would avoid a repetition of the vicious circle of competitive devaluations that had contributed to the Great Depression of the 1930s. Currently with 188 members it gathers funds through a quota system which stood up to USD1.0 trillion from which countries with payment imbalances can borrow funds temporarily. The IMF’s Executive Board which comprises of 24 members control the fund and considers options to enhance multilateral, financial, and bilateral surveillance and efficient allocation of monetary resources across member countries. The Managing Director is the head of the IMF staff and Chairman of the Executive Board, and is assisted by four Deputy Managing Directors. Currently Christine Madeleine Odette Lagarde heads the IMF as managing director. To maintain stability and prevent crises in the international monetary system, the IMF reviews country policies, as well as national, regional, and global economic and financial developments through a formal system known as surveillance. Under the surveillance framework...
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...International monetary fund was established in Bretton woods after World War 2 in 1944 after creating the World Bank. IMF was created to return equilibrium to countries that were suffering from economic deficit. Countries that are facing economic and financial problems, and are affected with the economic crisis, should be supported by the IMF, but there are some conditions in order to take that support and help, as well as the IMF have policies that works through. Members of IMF are 188 countries; these countries have the right to get helped from the program. IMF track the situations of the member companies and if they find any economic difficulties they help the country financially to achieve economic stability. IMF is lending some companies that are suffering from financial troubles for many reasons, the main role of IMF lending are handling the countries that are suffering from financial problems, settling their economies as well as helping the sustainable economic growth to retain. Helping countries financially helps those avoiding adverse shocks, which was caused by the global financial crisis, so IMF is needed to prevent countries from financial crisis. IMF also helps the suffered countries that work with short-trade in order to help them avoid some trade shocks by supporting their adjustments and the balance of payments. Examples of adjustments to shocks is disruptive economic adjustment which will have bad economic and financial effects on the country itself and on other...
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...| About IMF The International Monetary Fund (IMF) works to bring up International Monetary Cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth and to reduce the poverty around the world. IMF was created in 1945 and it’s an organization of 187 countries. Why IMF was created and how it works? The IMF, also known as the “Fund,” was conceived at a United Nations conference convened in Bretton Woods, New Hampshire, United States, in July 1944. The 44 governments represented at that conference sought to build a framework for economic cooperation that would avoid a repetition of the vicious circle of competitive devaluations that had contributed to the Great Depression of the 1930s. Work of IMF The primary mission of the IMF is to provide financial assistance to countries those countries who experience financial and economic difficulties and to sought those difficulties they are given financial help by using funds deposited with the IMF from the institution’s 187 member countries. Member of IMF states with balance of payments problems, which often arise from these difficulties, may request loans from IMF to help fill gaps between what countries earn and/or are able to borrow from other official lenders and what countries must spend to operate, including covering the cost of importing basic goods and services. In return, countries are required to launch certain reforms which have often been dubbed...
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...The IMF's primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with one other. This system is essential for promoting sustainable economic growth, increasing living standards, and reducing poverty. The Fund’s mandate has recently been clarified and updated to cover the full range of macroeconomic and financial sector issues that bear on global stability. The IMF was established at the Bretton Woods conference in 1944 to provide short term financial assistance to countries experiencing problems with their trade deficit or other Balance of Payments issues, so they could maintain stability in exchange rates i.e. stay fixed to USD value (i.e. gold value). Otherwise in case of a major trade deficit or Balance of Payments issues, countries may be tempted to print more money and devalue currency. In 1971 the dollar de-linked from gold and subsequently in the Jamaica Agreement in 1976, the IMF acknowledged its new role which was an evolution from protecting fixed exchange rates to surveillance of currency floats and managing economic stability. The IMF promotes clean floating i.e. there is minimal government intervention in establishing exchange rates and the market determines rates. As compared to “managed” (rates influenced by government intervention) or “dirty” floats (unfair government intervention). IMF conditionality refers to the requirement...
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...institution established by an international treaty in 1945 to create a framework for international economic cooperation focusing on balance of payment problems and the stability of currencies. IMF headquarters is in Washington D.C, U.S.A History / establishment of IMF: IMF was founded on 27th December, 1945. During the closing years of world war second, different countries realized that there must be a common International Forum for achieving economy cooperation, promoting International Trade and providing help to needy nations during emergency. So IMF was formed for this purpose. World War Second has its adverse effect on global economy. To remedy the situation, an international monetary conference was convened in 1944, at Bretton Woods in America. It was attended by the representatives of 44 countries. It was decided in this Conference to set up IMF for the economic development of all countries. Problems: Three main problems are: ▪ Economic order and piece ▪ Reconstruction of economies ▪ Stable world piece Role: The IMF was intended to play two major roles in the Bretton Woods System: o The fund should discourage aggressive exchange rate behavior by members and help them manage their balance of payments efficiently; o The fund was given resources to lend international reserves to countries with balance of payments difficulties. Purposes/ objectives The purposes of the International Monetary Fund are: • To promote...
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...Pamphlet Series No. 53 Governance of the IMF Decision Making, Institutional Oversight, Transparency, and Accountability Leo Van Houtven INTERNATIONAL MONETARY FUND 2002 Pamphlet Series No. 53 Governance of the IMF Decision Making, Institutional Oversight, Transparency, and Accountability Leo Van Houtven INTERNATIONAL MONETARY FUND Washington, D.C. 2002 ISBN 1-58906-130-6 ISSN 0538-8759 August 2002 The views expressed in this pamphlet, including any legal aspects, are those of the author and should not be attributed to Executive Directors of the IMF or their national authorities. Cover design and typesetting: IMF Graphics Section Please send orders to: International Monetary Fund, Publication Services 700 19th Street, N.W., Washington, D.C. 20431, USA Tel.: (202) 623-7430 Telefax: (202) 623-7201 E-mail: publications@imf.org Internet: http://www.imf.org Contents Preface ............................................................................................... List of Abbreviations ........................................................................ I. II. Introduction ........................................................................... Quotas and Voting Power in the IMF: A System That Calls for Greater Equity ................................................... Role of Quotas and the Debate on the Quota Formula............ Further Work Toward Correcting Distortions and Enhancing Equity in Voting Power .....................
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...conditionalities. Cocktail mixes of tax increases, spending cuts and privatisation of public sector assets have proven difficult for local governments to serve. The funds inability to keep pace with an expanding global economy suggest redefining itself with a more modest role that is fitting for such an international monetary system may be the best approach, As opposed to expanding the funds activities. Table of contents 1. Introduction page 1 2. Objectives page 1 3. Rationale page 1 4. Literature review page 2 4.1 The Mandate page 2 4.2 Consequences of IMF Programme Implementation page 2 4.3 IMF Relevance page 6 5. Conclusion page 9 6. Reference 1. Introduction This literature review will examine the effectiveness of intervention by the International Monetary Fund (IMF). It will challenge the results of IMF programs and attempt to derive whether the Fund still serves a meaningful role in today's global economy. The International Monetary Fund was formed during a United Nations conference at Bretton Woods, New Hampshire in July 1944. At its...
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...Predict Trends For The International Monetary Fund Introduction Global prosperity, as we know it, has resulted from the rapid integration of global trade and capital flows springing from the inter-linkage of diverse economies worldwide. However, the evolution of the world economy has occurred so rapidly that it has outpaced its regulators (Schwab, 2012). The International Monetary System, in accordance with its mayor international currencies, has been faced with a myriad of challenges. In this era of free global trade, the present dollar-based system is being forced to change (Schwab, 2012). With much speculation and evolving ideals, the most plausible solution has been the multipolar currency system based on the euro, dollar, and RMB (Schwab, 2012). In order to ensure a crisis-proof economic system, however, some economists believe this tripolar system must be backed by a Central Bank, an improvement in monetary regulations, and perhaps an induction of gold as a hedge and safe-haven asset. Introducing a World Central Bank within a three-currency monetary union: would this lead to greater stabilization and coordination of Macroeconomic Policies among countries? Some countries such as Germany have expressed interest in researching new alternatives to the existing rate regime, considering that neither of the two poles (fixed or flexible) are completely appropriate (Belke, Bernoth and Fichtner, 2011). According to Belke et al, the...
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...Functions of the International Monetary Fund The function of the Monetary Fund (IMF) is to provide loans to its members. It hereby uses different programs to supply a short, medium and long term solution. For entering, each member is charged a fee or quota. IMF main role is to intercede when there is an invitation, but also when a country can’t realize their international debts. The own currency of the IMF is the special drawing right (SDR). In order to provide fundamental changes in governmental relationships it though needs a borrower. That’s why its resources for dealing with crises are limited. Functions of the World Bank After World War II the original purpose of the World Bank was to assist helping the implementation of the Marshall plan - providing financing aid and programs to support the rebuilding of Europe. Soon its financials were insufficient. For these reasons it shifted towards backing up the development of nonindustrial countries and their economics. Functions of the General Agreement on Tariffs and Trade In the beginning there was the International Trade Organization (ITO) with its purpose to reduce tariffs. When it died in 1948, the General Agreement on Tariffs and Trade (GATT) has risen instead, focusing on bringing down trade barriers progressively. Therefore, countries will meet periodically and negotiate. It has been very successful thus far, but ignored the sectors of agriculture, textiles and apparel. One indicator given is “that international trade has...
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...IMF Working Paper © 1998 International Monetary Fund This is a Working Paper and the author(s) would welcome any comments on the present text. Citations should refer to a Working Paper ofthe International Monetary Fund The v i e w s e x p r e s s e d a r e t h o s e o f the a u t h o r ( s ) a n d d o n o t necessarily represent those of the Fund. WP/98/68 INTERNATIONAL MONETARY FUND Policy Development and Review Department Inflation, Disinflation, and Growth Prepared by Atish Ghosh and Steven Phillips1 Authorized for distribution by Timothy Lane May 1998 Abstract Although few would doubt that very high inflation is bad for growth, there is much less agreement about moderate inflation's effects. Using panel regressions and a nonlinear specification, this paper finds a statistically and economically significant negative relationship between inflation and growth. This relationship holds at all but the lowest inflation rates and is robust across various samples and specifications. The method of binary recursive trees identifies inflation as one the most important statistical determinants of growth. Finally, while there are short-run growth costs of disinflation, these are only relevant for the most severe disinflations, or when the initial inflation rate is well within the single-digit range. JEL Classification Numbers: E31, 040. Keywords: inflation, growth determinants, growth regressions, robustness. Authors' E-Mail Addresses: Aghosh@imf.org; Sphillips@imf...
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...According to the International Monetary Fund, inequality could lead to civil disorder. This is further emphasized by the Occupy protests, demonstrating the rising negative emotions that inequality has gone too far. Besides, inequality is economically damaging and inefficient as it limits the overall amount of growth in the market and depresses demand. Ancient social beliefs where ‘money equals power’ leads to unequal social standards due to inequality. This could pose as a threat to meaningful democracy. Furthermore, inequality undermines societies, resulting in lesser social mobility where the poor stays poor while the rich gets richer. Other than these, inequality is also linked to violence, mental health, crime and obesity. The scarce resources being monopolised by only the richest few could also result in an unsustainable future. Hence, inequality is environmentally unaffordable and destructive. A few doable actions that could be taken to tackle inequality includes paying a decent wage for decent wage. It is also important for the people to know that there is a safety net to help them and their family when they are facing certain financial problems. It is the government’s responsibility to ensure that there is free public services and good quality education for all to further reduce inequality. Certain rules and regulations should be enforced on taxation, especially the tracking down on tax avoidance and tax evasion. Progressive taxation is a must to reduce inequality as...
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...Annexure-V- Cover Page for Academic Tasks Course Code: Course Title: | Course Instructor: | Academic Task No.: Academic Task Title: | Date of Allotment: Date of submission: | Student’s Roll no: Student’s Reg. no: | Evaluation Parameters: (Parameters on which student is to be evaluated- To be mentioned by students as specified at the time of assigning the task by the instructor) | Learning Outcomes: (Student to write briefly about learnings obtained from the academic tasks) Declaration: I declare that this Assignment is my individual work. I have not copied it from any other student‟s work or from any other source except where due acknowledgement is made explicitly in the text, nor has any part been written for me by any other person. Student Signature: Evaluator’s comments (For Instructor’s use only) General Observations Suggestions for Improvement Best part of assignment S. No | Name of Student | Registration No | Peer Rating (10) | Signature | | | | | | | | | | | | | | | | Evaluator‟s Signature and Date: Marks Obtained: Max. Marks: ………………………… Subject: Rubrics for written report of ECO310 Category | 5 marks Exemplary | 2-4 marks satisfactory | 1 marks unsatisfactory...
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