How Do Member Countries Receive IMF Policy Advice: Results from a State-of-the-art Sentiment Index

Ghada Fayad, Chengyu Huang, Yoko Shibuya and Peng Zhao

No 2020/007, IMF Working Papers from International Monetary Fund

Abstract: This paper applies state-of-the-art deep learning techniques to develop the first sentiment index measuring member countries’ reception of IMF policy advice at the time of Article IV Consultations. This paper finds that while authorities of member countries largely agree with Fund advice, there is variation across country size, external openness, policy sectors and their assessed riskiness, political systems, and commodity export intensity. The paper also looks at how sentiment changes during and after a financial arrangement or program with the Fund, as well as when a country receives IMF technical assistance. The results shed light on key aspects on Fund surveillance while redefining how the IMF can view its relevance, value added, and traction with its member countries.

Keywords: WP; IMF Policy advice; commodity price; Fund advice; IMF increase fund traction; IMF quota; sentiment index; policy advice; Fund policy assessment; IMF member countries' reception; increase fund traction; IMF member countries' reception of Fund advice; IMF article IV staff report; Commodity price fluctuations; Machine learning; Financial sector; Financial Sector Assessment Program; Commodity prices; Global; Surveillance; Economic Policy; Sentiment Analysis; Natural Language Processing (search for similar items in EconPapers)
Pages: 42
Date: 2020-01-17
New Economics Papers: this item is included in nep-big and nep-mac
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