Has the IMF changed? Or has the world?
BY ANY standards, $500 billion is an impressive birthday present. The IMF’s managing director, Dominique Strauss-Kahn, turned 60 on April 25th, the same day the fund’s steering committee gave its blessing to a proposed tripling of the institution’s resources from $250 billion to $750 billion. As the birthday boy is fond of saying: “The IMF is back.”
But it is back in a new guise. The IMF is notorious for favouring hard money and tight budgets. The new fund (“IMF 2.0” as Time magazine called it) believes in casual Fridays and Keynesian policies. Since January 2008, Mr Strauss-Kahn has urged the world’s biggest economies to loosen their belts. And fiscal stimulus is not just for rich countries, he said at the spring meetings last week. Poor, well-run countries like Tanzania should also try it.
He also referred to a new position note* by Atish Ghosh and four other IMF economists, laying out the options for emerging markets in the global crisis. Those include monetary easing as well as fiscal stimulus and “heterodox” debt workouts.
See full Article.
Posts
