Tuesday, June 7, 2016

David F. Ruccio — Three guys, a paper, and the IMF


Celebrating change too early.
As if to confirm my view yesterday, that the recent paper on neoliberalism by Jonathan D. Ostry, Prakash Loungani, and Davide Furceri, published in the IMF’s Finance and Development, did not signal a new set of IMF policies, here’s an extract from an interview with IMF Chief Economist Maury Obstfeld:

IMF Survey: Do you agree with some who have argued that a recent article in F&D(“Neoliberalism: Oversold?”) signifies a major change in Fund thinking? For example, is the IMF now saying that austerity does not work and, indeed, that it exacerbates inequality?
Obstfeld: That article has been widely misinterpreted—it does not signify a major change in the Fund’s approach.
I think it is misleading to frame the question as the Fund being for or against austerity. Nobody wants needless austerity. We are in favor of fiscal policies that support growth and equity over the long term. What those policies will be can differ from country to country and from situation to situation.
Governments simply have to live within their means on a long-term basis, or face some form of debt default, which normally is quite costly for citizens, and especially the poorest. This is a fact, not an ideological position.
OK, so much for that. The light at the end of the tunnel was a approaching freight train.

Morons rule! Go morons.

Occasional Links & Commentary
Three guys, a paper, and the IMF
David F. Ruccio | Professor of Economics, University of Notre Dame

Here is the whole interview:

IMF
CHIEF ECONOMIST INTERVIEW
Evolution Not Revolution: Rethinking Policy at the IMF
IMF Survey

7 comments:

Matt Franko said...

Tom iirc 77% of Swiss recently voted AGAINST the guaranteed income... 77% AGAINST...

We've got BIIIIIGGG f-ing problems....

Matt Franko said...

"Governments simply have to live within their means on a long-term basis, or face some form of debt default, "

Tom since the IMF usually facilitates loans in foreign currency logically govts then have to live within their means (if they want to avoid default) ... so this is a true statement from the IMF pov...

The problem is these people are all operating under a "General Theory of Money!" rather than being specific about what currency system they are operating in....

Qualified people seek to be more specific in science/material systems analysis...

Ryan Harris said...

It's a good thing then that a governments 'means' aren't fixed and the size of "means" pie can grow when expansionary fiscal policy is applied to ensure full employment and maximum possible resource utilization to ensure inflation goals are never left unmet. As he says, it's not ideology, it's just a fact.

Bob said...

Ukraine is living within its means, yes sir!

Bob said...

The lesson here is to never take items out of context.

Ignacio said...

77% against UBI, but what would be for JG or means tested BIG.IDK but probably closer to 50%

That didn't surprise me tbh.

Random said...

Yeah this fails to separate out currency issuing governments on floating exchange rates and everyone else.

"Governments simply have to live within their means on a long-term basis, or face some form of debt default, which normally is quite costly for citizens, and especially the poorest. This is a fact, not an ideological position."

It is always buying real things for sale by keystrokes that is the constraint. If it is available for sale in the local currency or can be made and nobody else is using it then the government can buy it.

All federal spending causes an equivalent amount of taxation and increase in private net saving. Dollar for dollar. Each time, every time for any positive tax rate.
If the stuff isn't there, you don't spend. And you don't bid up prices. You offer an amount and let others bid more. If there is no bid, they'll take yours.