Reposted from The Governance Blog: The IMF’s perestroika moment – The Washington Post

The IMF’s perestroika moment – The Washington Post.

In some of its policy thinking the IMF has undergone deep transformations that often point in a more Keynesian direction. The most radical change has been in the IMF’s research on the systemic risks posed by the interconnectedness of global banks, followed by its views on capital controls, and its interventions in the austerity debate.

Surprising its critics, the IMF has endorsed capital controls — of which it was a staunch opponent for decades — as well as state spending to stimulate the economy under certain conditions. Moreover, it has been sharply critical of the theory — popular with E.U. institutions — that spending cuts reignite growth and has become an advocate of slightly more progressive taxation systems. The IMF now holds a strong preference for more spending on public investment and safety nets as the main instruments in the stimulus toolbox.

Most surprising, perhaps, has been the fact that the Fund’s research and position papers recently began to openly embrace a critical approach to global banks by portraying them as “super spreaders” of systemic risk.

Author: Makere

A transplanted New Zealand Scots/Maori academic/grandmother/random singer and sometime activist, my life is shaped by a deep conviction of the necessity for active critical engagement in the multi-faceted global and local crises of being and survival of species that confront us in the 21st century, the urgency of re-visioning the meaning of thriving together, and the contribution of Indigenous knowledge systems to a truly sustainable and just global society.

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