To what extent has the imf achieved its objectives?, Managerial Economics

To what extent has the IMF achieved its objectives?

The objective of achieving full convertibility of currencies has not been achieved.  In the first place countries impose restrictions in their trade with each other, and this has not helped the growth of world trade.  Secondly, the export capabilities of different countries are different and it is difficult for all currencies to be convertible in particular the range of exports for developing countries very limited and so is the demand for them.  This makes their currencies weak and unconvertible.

The objective of stabilizing exchange rates has not been achieved.  This is because outside the stated limits the adjustable peg system of exchange rates has the same limitations as the gold standard in that it is deflationary and can put strains on the country's foreign exchange reserves in times of a trade deficit and it is inflationary in times of a trade surplus.

While the IMF does give short-term assistance to member states in balance of payments problems, it is strictly on a short-term basis and it does not go to the root cause of the deficit.  A more useful form of assistance would be one that would go into projects that would increase the productive potential of the country, making it less dependent on imports and increasing its export potential.  Such assistance would have to be on long-term basis, but this is not within the objectives of the I.M.F., which gives assistance to finance a prevailing deficit.

Posted Date: 12/1/2012 4:50:41 AM | Location : United States







Related Discussions:- To what extent has the imf achieved its objectives?, Assignment Help, Ask Question on To what extent has the imf achieved its objectives?, Get Answer, Expert's Help, To what extent has the imf achieved its objectives? Discussions

Write discussion on To what extent has the imf achieved its objectives?
Your posts are moderated
Related Questions
Mankiw Model of Nominal Rigidities   There are two related reasons for which  firms do not  frequently change prices. First, as we saw in the discussion on menu costs, the cost

demand function is q=4850 - 5p(1) + 1.5p(2) + 0.1 Y WHEN Y=10000 p(1)=200 p(2)= 100 find income elasticity of demand for p(1)

Q. What do you mean by Kinked Isoquant? This isoquant presumes only limited substitutability of labour andcapital. There are just a few processes for generating any one commodi

The nature and function of money The development of money was necessitated by specialization and exchange.  Money was needed to overcome the shortcomings and frustrations of t


A cost-push inflation have as a result of workers' attempts to push up their wages. Thus, inflation does not have to be monetary phenomenon." Is this statement true, false, or unce

Functions or Purposes of Taxation The functions of taxation can be discussed from the activities of the government it is meant to achieve. These are: a.     Raise reven

Explain important terms of marginal productivity and wage inequality Marginal Productivity and Wage Inequality: a. Market power • Compensating Differentials • Dang

A profit-maximizing firm faces the following options for hiring workers: a) Assume the firm has limited space so that it can only hire one worker. Which type of employee sh

Suppose you have estimated the following demand function for the product you sell: Q = 5 - 0.2P At what price will the demand for your product be unitary elastic? (Hint: B