4-1 Discussion Global Dimensions

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Des Moines Area Community College *

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Economics

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Apr 3, 2024

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docx

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In your initial post, address two of the four bulleted questions below.  Ideally, which countries or organizations would provide the economic support for a government that needs a bailout? Is the IMF the ideal organization to bail out a country?  Is it ethical for the IMF to bail out countries that repeatedly make bad economic and fiscal decisions? Is it ethical for the IMF to have significant requirements attached to its loans?  What lessons should be learned from the Greek debt crisis for countries with debt obligation issues and for organizations such as the IMF? Hello all, When should a government, economy, or country be bailed out, if ever? Justify your answer with specific examples and how the bailout or lack of bailout would impact the global economy and the future of globalization. There are many scenarios when I think that a country would benefit from intervention to avoid a downfall. There is a difference between a country struggling and a country failing. There have been many economic hardships within the United States that did not require governmental intervention, but there have also been plenty that benefited from the intervention. Some events these events would include natural disasters, pandemics, or domestic factors (inappropriate monetary policies). An economic bailout can be crucial to the survival of a country. According to the IMF website, there are several factors that will make intervention more likely to work. These include “level of foreign exchange reserves, strength of domestic economy and financial system, intended exchange rate that is defensible, actions by central bank to manage the liquidity consequences of intervention, openness of the capital account, and private sector foreign currency exposure and how much it is hedged” (Singh, 2023). The IMF helped to stabilize the economy during the COVID-19 pandemic. They provided monetary support to stimulate the global economy in 2020. Ideally, which countries or organizations would provide the economic support for a government that needs a bailout? Is the IMF the ideal organization to bail out a country? I feel like the countries that make up the IMF should be the ones that benefit from its support. Each country that is a part of the IMF is required to pay into the fund, which helps to ensure that the money is there when a country needs to be bailed out. The amount that each country has to pay is set and reviewed each year. The stipulations/conditions that must be met are also reviewed each year to ensure that they are following the trends of the economy. The IMF has established multiple ways to fund emergency situations and know what they are doing, so I think they are the right people to be involved. A single country would not be able to provide support for another country, so it requires that a group

comes together to bail out those countries. The IMF seems to offer a lot more support to those countries that need bailed out than just money. The IMF is there to support growth for countries with struggling economies. Lindsey The IMF in history . IMF. (2023). https://www.imf.org/external/about/timeline/index.htm SINGH, S. (2023, March 1). The case for intervention . IMF. https://www.imf.org/en/Publications/fandd/issues/2023/03/POV-malaysia-the-case-for- intervention-sukudhew-singh

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