According to Barro and Lee, what is the impact of IMF lending on economic growth when all other factors are held constant?

Show Answers

It negatively influences economic growth during the same five-year period but boosts growth significantly in the following five years.It has no impact on economic growth within the same five-year timeframe but significantly reduces growth in the next five years.It leads to a notable increase in growth during the subsequent five-year period.It causes a rapidly worsening negative effect on growth over a ten-year span.It results in a moderate positive effect on economic growth over ten years.

Explanation

Barro and Lee's findings indicate that IMF lending does not affect economic growth during the concurrent five-year period. However, it is associated with a significant decline in growth in the following five years, assuming all other variables remain constant.