Any comments?

Brad De Long delong at econ.Berkeley.EDU
Tue Apr 11 11:22:00 PDT 2000



>Brad De Long wrote:
>
>>he IMF had nothing to do with the origins of the Mexican or East Asian crises
>
>Didn't the pressure for capital account liberalization, and the
>general encouragement of portfolio flows, have something to do with
>them? Especially if you include the influence of the IMF's
>string-puller, the U.S. Treasury?
>
>Doug

The argument over whether we should return to the world of John Maynard Keynes and Harry Dexter White--in which we regard international capital flows with fear and try to eliminate them--is a complicated one. I think no--that we can have the benefits of international capital flows without wrecking the whole world economy--but I am far from certain...

What is clear is that if we don't have large-scale international capital flows then we need the IMF and its resources to moderate big exchange rate swings; and if we do have large-scale international capital flows then we need the IMF and its resources to moderate the effect of panic in financial centers.

But we do need a kinder, gentler, larger, more touchy-feely IMF...

Brad DeLong



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