The IMFs Approach to Economic Stabilization Essay

The IMFs Approach to Economic Stabilization - Essay ExampleIn order to truly diagnose the situation, and properly understand the IMF and its online position in the world, we must ask the following questionsFounded in the turbulent era of the 1940s to stabilize the world economy, and based in Washington, D.C., the IMF (International Monetary Fund) is an system of 184 countries, working to foster global monetary cooperation, secure financial security, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty. (IMF, 2006). The IMFs maestro purpose was to establish a code of conduct that would enhance economic cooperation, and avoid the beggar-thy-neighbor policies that led to the economic turbulence of the thirties. (Babb & Buira, 2005). In short, the IMF is a multilateral governance that lends money to governments in order to stabilize currencies and maintain order in international markets. Since the IMF was established its purposes have remained unchanged, but its surveillance, financial service and technical assistance operations have developed regularly in order to meet the changing needs of its member countries in an evolving world economy. (IMF, 2006). The IMF plays a key theatrical role in defining how much governments can spendThe Funds view of what defines the macro economic stability of a country is the authoritative one for all development partners. (Eurodad, 2003). What are the Main Components of the IMFs Approach to Economic StabilizationParticularly so in recent years, the IMFs quantitative approach to economic stabilization has been the subject of considerable controversy. ( discern, 1999). Considered as the creator of the moral hazard, (Monsod, 1998), the IMF consists of many programs which are often characterized as being unnecessarily damaging to growth, harmful to the poor, unduly inflexible and unresponsive to the differing needs and stack of member countries, and based on rigid applicat ion of outmoded and discredited economic principles. (Mussa & Savastano, 1999). In order to understand the IMFs approach to economic stabilization and how it functions in all aspects, one must first understand the process of an IMF supported program typically an IMF supported program is not permanent or set in stone at the beginning of operations, but rather begins with the seemingly simple a request of a member. It is only then that the IMF staff prepares a blueprint of a program that is used for the actual basis of negotiations. After this, when an agreement is reached, the arrangement is cleared by IMF management and then approved by the IMF Executive Board. Disbursements live on immediately after this if all performance