What Is The IMF?
The IMF is a global organization that aims to promote international monetary cooperation and international economic stability whilst increasing the prosperity of international trade. The IMF also works to solve financial crises in the international economy (Greece being the most recent example) by using pro-Keynesian methods as opposed to the alternative method which is devaluation (reducing AD in the hope imports will fall and rescue the trade balance).What Is The Purpose Of The IMF?
> Promote international monetary cooperation.> Facilitate the expansion and balanced growth of international trade.
> Provide exchange rate stability.
> Ensure multilateral payment systems are keep functioning fairly, efficiently and are regulated sufficiently.
> Provide financial aid to members who are struggling to cope with certain financial crises.
Drawbacks Of The IMF
>Places strict and sometimes unreasonable conditions with its financial aid packages.
>Dominated by the biggest contributors (i.e. the USA is significantly more powerful than other smaller nations like Poland even if they each give the same % of GDP).
> 2001 Argentinean crisis showed the failures of hefty budget restrictions and that the aid is not always beneficial.> Critics say the IMF encourages Globalization and is increasing the global disparity of income by making LDC's more dependent on the developed nations.