Abstract
The International Money Fund was established as an intermediary to overcome the 1929 World Economic Depression and economic destruction of World War II, balance payment problems, imbalance of international monetary system, and shrinking international trade. However, the role of the IMF has changed with the new developments in the world economy, and after 1980 with its applications called “structural adjustment program,” IMF has increased its effectiveness, and it has become an important authority on the crisis occurred with the globalization. In this chapter, the historical development of IMF and Turkey's relationship and its effects on the Turkish economy is discussed. The economic conditions led Turkey to apply to the IMF and all of the agreements made between IMF and Turkey, and as a result of those, the macroeconomic parameters of the Turkish economy are evaluated. The effects of the IMF stability program on the Turkish economy, applied by Turkey as a result of the agreements made with IMF, are analyzed with VAR econometrical model. The effects of IMF loans on balance of payments, current account deficits, economic growth, and inflation rates are analyzed. The macroeconomic parameters are compared with t test to find out if there is any meaningful difference on those parameters between the periods with agreements made with IMF and the periods without any agreements.
TopThe Foundation And Purpose Of The Imf
The IMF was born on December 27, 1945, when 29 countries signed the Bretton Woods agreement, and began financially on 1 March 1947. 80% of the fund quota is committed. The IMF has a Convention on International Monetary Fund. The Articles of Association, consisting of 31 articles and various annexes, encompasses various provisions ranging from the organization of the Fund to its functioning, from relations with member countries to the Fund staff. Since 1944, the IMF Treaty has undergone significant changes. The first amendment came into force on July 28, 1969, and thus the special drawing rights (SDR) were created. The second significant change was made on 1 April 1978. With this amendment, the share of gold in the Funds resources has been reduced and regulations have been introduced to make SDR an important reserve (Önis, 2006).
Key Terms in this Chapter
IMF: International Monetary Fund.
VAR: Vector autoregression analysis.
Logit: It is a model to make relationship analysis when the dependent variable has two different alternatives.