THERE is a popular quip (popular in some circles, anyway) that the International Monetary Fund’s acronym stands for “It’s Mostly Fiscal”. In the 1990s it was taken as a given that the Fund would advocate for tighter fiscal policy, whatever an economy's problems might be. To some of those on the receiving end of recent IMF interventions, Olivier Blanchard, who will reportedly retire from his position as the chief economist of the Fund, is the living embodiment of that obstinate approach. Yet in his time at the IMF Mr Blanchard oversaw the production of a stream of thought-provoking research, some of which challenged the conventional economic orthodoxy the Fund is often seen as representing. His work interrogated the world's economic performance before and through the financial crisis, then helped led the academic and policy debate on matters of the highest macroeconomic importance. The Fund will miss him; so, too, will the Fund's supplicant countries.
Mr Blanchard assumed his role at the IMF in September 2008. He had no honeymoon period to enjoy. That month, Lehman Brothers, a giant investment bank, collapsed and threatened to take the...Continue reading
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