It is often argued that the provision of liquidity by the international institutions such as the IMF to countries … point out that official lending also causes moral hazard distortions: expecting to be bailed out by the IMF, debtor … three classes of optimizing agents: international investors, the local government and the IMF. We show how an international …

The provision of liquidity by international institutions such as the IMF to countries experiencing balance of payment … problems could prevent liquidity runs but could also cause moral hazard distortions: expecting to be bailed out by the IMF … and policies by three classes of optimizing agents: international investors, the local government and the IMF. We show how …