Greg Ip

Articles by The Economist’s U.S. Economics Editor

Archive for the ‘IMF’ Category

Austerity and the markets: The perils of prudence

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More evidence that austerity can backfire

Jan 28th 2012 | WASHINGTON, DC | from the print edition

[Greg Ip] THE fiscal hawks should be pleased. For all the hand-wringing about public profligacy, budget deficits across the rich world fell by about 1% of GDP last year. Moreover, that was almost all the result of policy actions (spending cuts and tax rises) rather than cyclical effects.Germany, France, Spain and Italy all managed to reduce their structural budget deficits, the latter three thanks to austerity. All are expected to reduce those deficits further this year, the International Monetary Fund said on January 24th. But this may not be good news. Austerity can unnerve markets, not calm them. Read the rest of this entry »

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January 26, 2012 at 1:34 pm

Not liberal or conservative, just incoherent

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IN ITS updated global forecast released this morning, the IMF warns against “premature and incoherent exit” from government support for the economy. “Incoherent” nicely describes the policy debate in Washington. Partisans have aimed their poison at the Federal Reserve and at the government’s fiscal policy choices but what, exactly, do they want? The logical implications of their complaints are contradictory at best and dangerous at worst. Read the rest of this entry »

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January 26, 2010 at 7:01 pm

For once, a positive parallel to the 1930s

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The original blog post is linked here.
IN THE prelude to the G20 meeting, many commenters, including this newspaper, worried of a repeat of the London Conference of 1933. Franklin Roosevelt is often accused of wrecking it with his refusal to return to the gold standard. The resulting disarray, it is said, deepened the Depression.

Yet one could argue that in its failure to return the world to gold, the 1933 conference was a success. Markets greeted Roosevelt’s July bombshell “enthusiastically”, notes economic historian Allan Meltzer. They correctly anticipated “reflation, rising output, and a vigorous policy of domestic expansion.” As Barry Eichengreen has demonstrated, the gold standard was a monetary straitjacket that transmitted deflation between countries; each country’s recovery is highly correlated with when it abandoned gold.

On this front, I see a parallel (though perhaps a tortured one) with the G20’s decision to boost the IMF’s lending resources from $250 billion to $1 trillion. Read the rest of this entry »

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April 6, 2009 at 8:45 pm

The IMF: More to give

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Mar 12th 2009 | WASHINGTON, DC


America proposes boosting the IMF’s ability to lend to countries in distress


The original story is linked here.

SINCE the financial crisis went truly global in the second half of 2008, the resources of the International Monetary Fund, the principal firebreak against global contagion, have looked increasingly inadequate. The fund has about $250 billion of usable capacity at its disposal to lend to countries in distress, but a lot of that has now been spoken for. The IMF has called for its ability to lend to be doubled.

The big countries that are the IMF’s main shareholders agree in principle, but there has been no consensus yet on just how to go about boosting the fund’s resources. On Wednesday March 11th Tim Geithner, America’s treasury secretary, proposed boosting the IMF’s credit line with rich countries to an impressive $500 billion from its present $50 billion. Read the rest of this entry »

Written by gregip

March 12, 2009 at 4:03 pm