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The International Monetary Fund, the World Bank and Financial Stability: The Case of Russian and East Asian Financial Crises

Valvi, Aikaterini C. and Fragkos, K.C. and Frangos, C.C. (2012) The International Monetary Fund, the World Bank and Financial Stability: The Case of Russian and East Asian Financial Crises. Journal of Economics Studies and Research , ISSN 2165-9966.

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Official URL: http://dx.doi.org/10.5171/2012.904328

Abstract

The role of the International Monetary Fund (IMF) and the World Bank (WB) in providing financial stability to countries with financial problems has received conflicting views from different social and political groups. The purpose of this paper is to examine whether these two international organizations provide financial stability by focusing on the case of the Russian and East Asian financial crises. After a comprehensive analysis (graphs, tables and statistical regression models), the researchers found that the support of both the IMF and the WB was mostly without success in these two crises; thus promoting financial instability. This finding comes from both a descriptive analysis of financial stability in terms of unemployment, inflation and changes in GDP and GDP per capita and quantitative calculations by performing multiple linear regressions in PASW 18.0 with certain indicators [GDP Annual growth rate, Interest rate spread (lending rate minus deposit rate, %), Inflation, GDP deflator (annual %), Annual industrial value and GINI Index]. The intervention of these international organizations appears to have been followed by unemployment and inflation rises, as a result of their financial policies. These results provide important incentives for international policy changes in dealing with financial crises, emphasizing the importance for less destabilizing practices.

Item Type: Article
Additional Information: Article ID 904328
Keyword(s) / Subject(s): Financial Stability, International Monetary Fund, World Bank, East Asia
School or Research Centre: Birkbeck Schools and Research Centres > School of Business, Economics & Informatics > Management
Depositing User: Ms Aikaterini C. Valvi
Date Deposited: 19 Jun 2012 11:13
Last Modified: 17 Apr 2013 12:23
URI: http://eprints.bbk.ac.uk/id/eprint/4804

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