Exchange rate stabilization and IMF high interest rate policy: a critical reconsideration using a dynamic model

摘要

There has been a great deal of criticism voiced against the International Monetary Fund's prescription for dealing with the Asian currency crisis. Radelet and Sachs (1998) argued that the closure of banks in Indonesia in November 1997 brought on investor panic which worsened the crisis. Feldstein (1998) argued that the incorporating of structural reform policies with conditionality was inappropriate for dealing with the short-term liquidity crisis. Rodrick (1998) and Bhagwati (1998) called into question the IMF's intention of liberalizing capital transactions. Bhagwati also criticized the powerful influence on the IMF of the close relationship between the U.S. Treasury Department and Wall Street financial institutions through their exchange of personnel, what Bhagwati calls "a Wall Street Treasury complex," which has had a significant influence on the formulation of IMF policies. Even the World Bank (1998), the IMF's "Bretton Woods sister institution," has discreetly criticized the failure of IMF policies to cope with the Asian crisis. Noteworthy in this criticism has been the reference to monetary policies, attesting to doubts among many about the effectiveness of IMF intentions to maintain stable exchange rates through high interest rate policies.