ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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IMF and Fiscal Policy

The principal reason that critics of IMF programmes fear a deflationary bias is the negative effect that it is expected to have on short-run growth rates. The third report of the Independent Evaluation Office has two different findings on whether such a bias exists. It finds that average growth rates did not decline in programme years as compared to non-programme years, with some exceptions. The other finding is that there is no evidence that IMF programmes have an adverse impact on health and education spending. There may, in fact be a modest positive impact.

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