Disruptive international capital flows were a central issue when the International Monetary Fund was created at the end of the Second World War. Capital-flow doctrine has radically shifted over time, attempting to reconcile conflicting objectives and opinions. The IMF Independent Evaluation Office
Earlier this week, New Zealand moved out of total lockdown into a phase of continuing control on social movement, but with an opening of widespread economic activity. Schools reopened partially. It is estimated that about half a million people returned to work after a stand down of five weeks.
The International Monetary Fund is like a priesthood, with long-established beliefs that evolve at a glacial pace. A new managing director presents a rare opportunity for reform. Can Kristalina Georgieva, appointed last October, change the Fund’s doctrinal beliefs?
Writing in the Financial Times
Revision season is well underway at the top of the institutions that underpin the globalised economy, those same institutions now in the cross hairs of Prime Minister Scott Morrison’s audit of what Australia gets from globalism.
In the last week, the heads of the
The race is on to see who will take over as Managing Director of the International Monetary Fund (IMF) following the nomination of the incumbent, Christine Lagarde, as President of the European Central Bank (ECB).
Will the informal gentleman’s agreement between Europe and America that has
Saudi Arabia was the first country Imran Khan visited after assuming office as Pakistan’s new Prime Minister. As he made the trip last month, he asked for financial help for Pakistan’s turbulent economy.
Soon after his return, it was announced that Pakistan had invited Saudi
Gita Gopinath has been appointed as Chief Economist at the International Monetary Fund, to take over from Maurice Obstfeld at the end of the year.
She is academically well-qualified. The job, however, is not just about academic economics. The IMF is like a priestly order, with established
National debt in Pakistan has soared past US$92 billion and its servicing costs are projected to reach 30% of the federal budget.
The current economic crisis in Pakistan poses political trade-offs between supporting economic growth, protecting domestic consumers, and meeting external obligations.
The role of the multilateral development banks (MDBs) and other international financial institutions (IFIs) is back in the policy spotlight.
The latest attention comes via the G20 Eminent Persons Group (EPG) on Global Financial Governance, formed by G20 Finance Ministers at their meeting
Barry Sterland’s new Lowy Analysis explores the possibility of a future economic crisis in our region – this is not today’s problem, but something we should be prepared for. The paper benefits from his years of experience in the Australian Treasury and the International Monetary Fund. It sets
If Australia’s economic future lies in Asia, then managing the risk of financial crises in the region should be a top concern. Especially as any crisis could also have significant geopolitical consequences.
In an analysis for the Lowy Institute, Barry Sterland looks at what Australia can do
Australia can use its economic diplomacy to manage economic risks in the region, and should engage with the International Monetary Fund and regional partners to close gaps in crisis response arrangements (Photo: Getty Images/Thomas Mnller
With this month marking the 20th anniversary of the forced floating of the Thai baht, the IMF has joined the numerous commentaries looking back on the Asian crisis and the lessons learned. The tone of a recently published blog post by IMF Deputy Managing Director Mitsuhiro Furusawa is one
The IMF's Independent Evaluation Office (IEO) was set up in 2001; since then it has produced 26 thoughtful and substantial reports on a wide range of IMF activities. Now the head of the IEO has co-authored a book with the key recommendation that the IMF should use the IEO evaluations to enhance its
It finally happened. The US delivered on its long-standing promise to deliver the 2010 IMF quota and governance reforms, spreading a cascade of pre-Christmas cheer across the economic policymaking world.
My colleague Mike Callaghan has neatly summarised the implications on US leadership. I want to
The US Congress has finally passed long awaited IMF governance reforms. President Obama claimed it as a victory for the White House that will strengthen 'America's leadership of the IMF'. USA Today reported 'Congress finally preserves US leadership in global finance'.
Some leadership. With the US
On the 30th of November, the IMF announced its decision to include the Chinese yuan in the Special Drawing Rights (SDR) basket.
Terrific, I hear you say, yet another TLA to understand (Three Letter Acronym). Bear with me. I could go through the technical details of how it all works, but I suspect
With this year's summit season coming to an end, Turkey will officially hand over the G20 hosting baton to China on 1 December 2015. The Hangzhou Leaders' Summit has already been announced for 4 and 5 September 2016, slightly earlier than previous years to avoid clashing with the US presidential
This week's cover-story in The Economist warns of an impending debt crisis in the emerging economies. This is seen as the third stage in the ongoing debt saga: first came the 2008 'global' crisis; then the 2010 crisis in Greece and the European periphery; now the emerging economies.
Over the last few weeks, global financial markets have once again demonstrated their predilection for over-reacting to ephemeral news. For their part, the media are always happy to pad out the 24-hour news cycle with a breaking crisis. If it's transient, so much the better: you can report a fresh
Just about everyone agrees that the Greek problem has been kicked down the road again, and probably not even very far.
The fantasy nature of the 'agreekment' is clear. Let's put to one side, for instance, a structural reform program which demands that Sunday be mandated as a work-day. This might
When we get enough perspective to write a balanced history of the 2008 global financial crisis and the subsequent feeble recovery, fiscal policy mistakes will surely feature largely in the narrative. In the form of a new IMF paper, we are beginning to see that history taking shape, and with it a
Rather than focus on the blow-by-blow developments of the umpteenth meeting in the Greek crisis, here are some higher level issues that often get lost in the summitry din:
At the moment, the parties are negotiating over a disbursement of €7.2 billion. This is the last €7.2 billion to be
With Greece once again teetering on the brink of default, a recent paper from the Centre for International Governance Innovation explores one episode in the amazing saga of how this tiny country came to threaten the viability of the euro, and left a damaging legacy for procedures and governance at
Forecasts prepared for the IMF's 'Spring Meeting' in Washington last week predict global growth of around 3.5% this year, about the same as in the last few years. This is not the 'slowing' discussed so often in earlier Fund documents, but nor is it the normal robust recovery that might be expected
This week we've had the IMF and World Bank spring meetings.
Economic heavy-hitters from around the world descend on DC to attend committee meetings, seminars, briefings, and other policy-maker fun. Also, the IMF's World Economic Outlook is released. Chapter 4 in the most recent edition looks at
In 2002 David Dollar and Art Kraay, both at the World Bank at the time, published an article in the Journal of Economic Growth called 'Growth is Good for the Poor'. Dollar and Kraay showed that if an economy's growth increased by a percentage point, then growth of the incomes of the poor increased
What is best practice for the governance of the Chinese-initiated Asian Infrastructure and Investment Bank (AIIB)? Australia says this remains a major concern, even though it has finally agreed to become a prospective founding member of the bank.
2014 Annual Meetings of the Board of Governors of
The 2008 global financial crisis provided a rare test-bed for macroeconomics — an opportunity to sort out some old controversies. One issue dominated the debate during the recovery phase: with national budgets and official debt pushed up by the crisis, should budget austerity be imposed as a
Australia's likely decision to become a founding member of the Asian Infrastructure Investment Bank (AIIB) marks the loosening of America's 70 year command over global governance.
US Secretary of State John Kerry and World Bank President Jim Yong Kim at the African Growth and Opportunity Act
We live in strange economic times. Depositors in Denmark are paying interest to their banks and borrowers are being paid when they take out a loan. The basic principles of finance have been turned on their head.
One commentator has noted that 'something economists thought was impossible is
This week the IMF Executive Board will consider a proposal to provide Ukraine with a US$17.5 billion Extended Fund Facility. The IMF Managing Director explains that this program 'can succeed'. But it has to be said that the chances are low, given current geopolitical circumstances and Kiev's recent
The press is making much of the academic qualifications of Greece's new finance minister, Yanis Varoufakis. His specialisation is economic game theory, which in this case might be described as 'the art of bargaining'. Good bargaining skills are, indeed, important. But there are also some basic
By Lowy Institute Non-Resident Fellow Mike Callaghan and G20 Research Fellow Tristram Sainsbury
When it comes to IMF quota reform, the words of Yogi Berra come to mind: 'It's like deja vu all over again'.
IMF First Deputy Managing Director David Lipton and Managing Director Christine Lagarde,
When the IMF produced its last World Economic Outlook in October, one of the risks it forecast was a possible oil price increase. A US$25 per barrel increase, the IMF said, would take at least 0.5% off global economic growth.
Now, even with the change in oil price twice as large and in the opposite
The fall in the world oil price has created the opportunity to eliminate petroleum subsidies in a number of Southeast Asian countries. These subsidies have been the long-standing bane of economic reformers everywhere, but until now reducing them involved the deeply unpopular task of raising petrol
Headlines blaming the IMF for the Ebola crisis are something you may expect in the tabloid press. However, a robust debate on the role of the IMF in the spread of Ebola was started by an article in The Lancet, a leading health journal.
Four British professors claimed that the fiscal austerity
Sometimes a picture is worth a thousand words.
With the G20 focused on increasing economic growth, it's worth remembering where the global action is. The above graph from the IMF Multilateral Policy Issues Report, published in July, shows that the emerging economies have been doing the heavy
Economic forecasting is the butt of jokes, but someone has to do it. You can't make sensible macro policy without some view of how the economy will travel. It's the IMF's thankless job to be the high-profile forecaster for the globe. The Fund's latest World Economic Outlook acknowledges its recent
In its latest World Economic Outlook, the IMF has joined the chorus of international institutions (G20, OECD) calling for more infrastructure spending.
What new elements does the Fund bring to this argument? Global growth has been disappointing. One reason is that governments have cut back on
Last weekend's meeting of G20 finance ministers in Cairns achieved more than many other similar G20 meetings. But will it 'change the destiny of the global economy' as claimed by Treasurer Hockey? It could, but only if G20 countries deliver on their good intentions with policy action.
The long running Argentine debt-default saga has taken another step forward (or backwards, depending on your viewpoint). The US Supreme Court has ruled definitively against Argentina over 'sovereign immunity'. The ramifications, however, go far beyond Argentina.
Although sovereign debt
If you make a mistake, common courtesy says you should apologise. The IMF made a mistake in its forecasts for the UK economy — a high profile mistake. It admitted it got it wrong. But should the IMF have apologised?
In 2013, IMF chief economist Olivier Blanchard publicly said that UK
Much of the mountain of commentary and analysis of the 2008 Great Recession has been either critical (Paul Krugman might be typical), or a self-interested defence (Tim Geithner and Larry Summers provide examples). Daniel Drezner's The System Worked is atypical in two respects: he was not a
GDP growth. (Source: IMF WEO Chapter 1.)
The latest IMF World Economic Outlook (WEO) records a watershed moment for the global economy. In terms of purchasing power GDP, the emerging and developing economies are now clearly larger than the advanced economies. Moreover, they have accounted for
The way they were. Yanukovich and Strauss Kahn in 2010.
Ukraine faces an economic crisis as well as a political one. Its economy is a mess and it will take a lot of money and time to put it on a sustainable growth path. It may not have enough of either. Caught in the middle is the IMF.
One of the many lessons of the 2008 financial crisis is that emergency bailout funding (such as an IMF-orchestrated rescue) seriously distorts the operation of financial markets.
Emergency funding helps both the insolvent country and its foreign creditors, improving their repayment prospects. But