ABSTRACT
The International Monetary Fund (IMF) is often called to assist developing countries in financial crisis. To evaluate the needs of the developing countries as well as their progress in overcoming such crises, the IMF needs a conceptual framework. This is what we are calling IMF-type macro models for developing countries. This approach is important for several reasons, not the least of which is the fact that the global financial community’s perception of the performance of the developing country in question is often influenced by the IMF’s evaluation. Hence, the IMF view on their performance has profound effects on the prospects for developing countries. In this chapter we study a simplified version of the IMF’s approach and then a more formal model that has been built around it. Alternate views on the macroeconomic structure of developing countries are provided in the subsequent two chapters.
