We investigate the political economy of IMF forecasts with data for 157 countries (1999-2005). Generally, we find evidence of forecast bias in growth and inflation. Specifically, we find that countries voting with the United States in the UN General Assembly receive lower inflation forecasts as domestic elections approach. Countries with large loans outstanding from the IMF also receive lower inflation forecasts, suggesting that the IMF engages in "defensive forecasting." Finally, countries with fixed exchange rate regimes receive lower inflation forecasts, suggesting the IMF desires to preserve stability as inflation can have detrimental effects under such an exchange rate regime. © 2008 Springer Science+Business Media, LLC.

Dreher, A., Marchesi, S., & Vreeland, J. (2008). The political economy of IMF forecasts. PUBLIC CHOICE, 137(1-2), 71-145 [10.1007/s11127-008-9318-6].

The political economy of IMF forecasts

MARCHESI, SILVIA;
2008

Abstract

We investigate the political economy of IMF forecasts with data for 157 countries (1999-2005). Generally, we find evidence of forecast bias in growth and inflation. Specifically, we find that countries voting with the United States in the UN General Assembly receive lower inflation forecasts as domestic elections approach. Countries with large loans outstanding from the IMF also receive lower inflation forecasts, suggesting that the IMF engages in "defensive forecasting." Finally, countries with fixed exchange rate regimes receive lower inflation forecasts, suggesting the IMF desires to preserve stability as inflation can have detrimental effects under such an exchange rate regime. © 2008 Springer Science+Business Media, LLC.
Articolo in rivista - Articolo scientifico
IMF; Economic Forecasts; Political Influence
English
71
145
Dreher, A., Marchesi, S., & Vreeland, J. (2008). The political economy of IMF forecasts. PUBLIC CHOICE, 137(1-2), 71-145 [10.1007/s11127-008-9318-6].
Dreher, A; Marchesi, S; Vreeland, J
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/10281/1696
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