What is the IMF?

Growing up and learning about world economics was super boring. So, don’t worry if you don’t know what an IMF is. I didn’t for a long time. Nevertheless, your understanding of the importance of the IMF and the world economy will by no means determine how rich you will be. But it will serve you better and most likely deliver you more opportunities that you may or may not need. However, with this article all, I will do is define what is the IMF, who controls it, and how it works in the global economy.

What is the IMF?

So, what is the IMF? To start the acronym stands for International Monetary Fund. This fund works with 190 different countries in order to achieve sustainable growth and prosperity. The International Monetary Fund does this by supporting economic policies that promote financial stability and monetary cooperation. Which are essential to increase productivity, job creation, and economic well-being for all countries involved. The best way to think about the international monetary fund is they are the world’s bank. Each country is able to pull loans from this fund.

Who Controls the IMF?

Founded in 1944 by the United Nations the 44 countries wanted to build a framework of international economic cooperation that would help avoid recreating the Great Depression. This is an easy way of saying that the 44 countries wanted to create an open-source economy. Also known as a free-market economy. All of the members of the United Nations help run the IMF. They appoint a governor to be the lead every so often. Decisions will be made by a team appointed by the United Nations.

How does the IMF Work?

The International Monetary Fund benefits the UN in 3 ways. The first way is through policy advice. What that means is, that they monitor economic and financial developments and advise countries. The second way is through financial assistance. That is through loans and financial assistance. Think like when individuals or companies need loans and financial aid but for an entire country. The third way is through capacity development. All capacity development means is that they help give advice to countries to help make smart business decisions. It’s just that simple! They are just a bank that helps countries make smart decisions and helps them monetarily.

Takeaway

Hope you enjoyed this article and learned something new about the IMF. As I mentioned earlier, learning about the IMF is not necessary for your future wealth. But having holistic economic knowledge helps you understand the bigger picture. Well, it did that for me at least. But the more you know, the better. Let me know if this was helpful. If you are looking for any additional resources on this topic check out this book!

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