University Economics: The IMF's Unmet Challenges Analysis

This report provides a comprehensive analysis of the IMF's Unmet Challenges, based on the article by Eichengreen and Woods. It begins with an overview of the IMF's contentious role and its core functions. The report delves into the four key challenges: surveillance of member states' economic policies, the role of conditionality in lending, the management of sovereign debt problems, and governance reforms within the IMF. It examines the theories of Purchasing Power Parity (PPP) and the International Fisher Effect (IFE), explaining how they theoretically make derivatives unnecessary, while also evaluating the ways derivatives can protect against the failings of these theories. The report also includes a discussion on the IMF's role in exchange rates, capital flows and the need for governance reforms.