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The IMF and Economic Recovery: Is Fund Policy Contributing to Downside Risks?

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  • Mark Weisbrot
  • Juan Antonio Montecino

Abstract

The IMF’s most recent World Economic Outlook (WEO), published last week, projects world economic growth will slow, from 4.8 percent in 2010 to 4.2 percent next year. Throughout the report, there are numerous concerns expressed about the “fragility” of the global economic recovery. The Acting Chair of the Executive Board states that “[t]he recovery is losing momentum temporarily during the second half of 2010 and will likely remain weak in the first half of 2011, as extraordinary policy stimulus is gradually withdrawn.” In view of the report and its findings, one might expect a strong bias towards continuing fiscal stimulus in weak economies, and a bias against fiscal consolidation. However, this paper finds that the IMF continues to support pro-cyclical policies in some countries, fiscal consolidation in many others, and clearly does not support central bank financing of fiscal stimulus – even in countries such as the United States – where the threat of high inflation is very remote.

Suggested Citation

  • Mark Weisbrot & Juan Antonio Montecino, 2010. "The IMF and Economic Recovery: Is Fund Policy Contributing to Downside Risks?," CEPR Reports and Issue Briefs 2010-24, Center for Economic and Policy Research (CEPR).
  • Handle: RePEc:epo:papers:2010-24
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    File URL: http://www.cepr.net/documents/publications/imf-and-economic-recovery-2010-10.pdf
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    References listed on IDEAS

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    1. Dean Baker, 2010. "Feel No Pain: Why a Deficit in Times of High Unemployment is Not a Burden," CEPR Reports and Issue Briefs 2010-22, Center for Economic and Policy Research (CEPR).
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    Cited by:

    1. Mark Weisbrot & Rebecca Ray, 2011. "The Scorecard on Development, 1960-2010: Closing the Gap?," CEPR Reports and Issue Briefs 2011-09, Center for Economic and Policy Research (CEPR).
    2. Ortiz, Isabel. & Cummins, Matthew. & Capaldo, Jeronim. & Karunanethy, Kalaivani., 2015. "The decade of adjustment : a review of austerity trends 2010-2020 in 187 countries," ILO Working Papers 994890453402676, International Labour Organization.

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    Keywords

    IMF;

    JEL classification:

    • E - Macroeconomics and Monetary Economics
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F - International Economics
    • F3 - International Economics - - International Finance
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F37 - International Economics - - International Finance - - - International Finance Forecasting and Simulation: Models and Applications
    • O - Economic Development, Innovation, Technological Change, and Growth
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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