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Evaluating IMF intervention ten years after the Russian crisis: modelling the impact of macroeconomic fundamentals and economic policy

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journal contribution
posted on 2023-06-08, 15:13 authored by Malgorzata Sulimierska
The ongoing global financial crisis has become prominently visible since September 2008. This crisis affected the whole world and enhanced the importance of policy implementation to mitigate financial crises in future. Many academics blamed insufficient domestic regulation as the reason of crises, others pointed to the lack of overseas financial regulation and inappropriate actions by international organizations, such as the IMF and World Bank. This whole discussion encouraged a look back and analyzes of a previous crisis in a small country such as Russia. This paper evidently shows the inefficiency of IMF policy during the Russia Crisis in 1998 by implementing a new monetary balance- of-payment model in Russian data. This model identified the role of macroeconomic fundamentals and international economic policy implications on the likelihood and the timing of the currency crisis in Russia. For the period from December 1995 to December 1998 it was found that, the increase in domestic credit growth gradually undermined confidence in the fixed exchange rate regime. The most dangerous point was at the end of 1998, when the collapse probability was above 90 percent. This result called to doubt the IMF’s July packet 1998 and revealed the political aspects of this financial help.

History

Publication status

  • Published

File Version

  • Published version

Journal

International Journal of Business Insights and Transformation

ISSN

0974-5874

Publisher

I T M Business School

Issue

1

Volume

6

Department affiliated with

  • Business and Management Publications

Full text available

  • Yes

Peer reviewed?

  • Yes

Legacy Posted Date

2013-06-14

First Open Access (FOA) Date

2013-12-01

First Compliant Deposit (FCD) Date

2013-06-13

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