Class Year

2016

Date

4-2016

Document Type

Thesis

Distinguished Thesis

Yes

Degree Name

Bachelor of Arts (BA)

Department or Program

Economics

Second Department or Program

International Relations

First Advisor

S. Aneeqa Aqeel

Second Advisor

James Marquardt

Third Advisor

Robert Lemke

Abstract

Since the founding of the International Monetary Fund (IMF), there has been much debate over the effectiveness of the institution in promoting sustainable economic growth in countries that participate in their loan programs. This present study attempts to answer the question of whether the IMF has been successful in promoting economic growth by using a difference-in-differences analysis to examine the effects of program participation on real GDP growth, gross capital formation, and the unemployment rate. A sample of 177 countries and data from the World Bank Data Bank is used to estimate the quantitative effect of IMF programs on these variables of interest. My model reveals a negligible overall impact on growth of real GDP and gross capital formation in countries that have taken IMF loans. In high-growth countries, IMF loan assistance has had an average positive effect on real GDP growth, and gross capital formation. In low-growth countries, IMF loan assistance had a smaller average positive effect on real GDP growth and gross capital formation. Finally, IMF participation resulted in higher unemployment rates for countries that exhibit both high and low average unemployment rates.


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