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International Monetary Fund

template —employed by Fund country teams in advising national authorities on policy formulation. The second part of paper seeks to assess how well this process works in practice. Since this is difficult to do directly, the approach taken here is to examine whether there are systematic errors in program projections of key near-term macroeconomic variables—output, inflation, and the current account balance—and in the relationships between policies and targets implicit in the design of Fund-supported programs. Turning to longer horizons, the paper examines the record on

International Monetary Fund
The first part of this paper lays out the process of program design and briefly describes some of the analytical tools--including the financial programming framework, the balance sheet approach, and the debt sustainability template--employed by Fund country teams in advising national authorities on policy formulation. The second part of paper seeks to assess how well this process works in practice.