Open, wide-ranging, and balanced discussion. For Olivier Blanchard—and co-hosts David Romer, Michael Spence & Joseph Stiglitz—that was the goal of last month's conference at the IMF on the future of macroeconomic policies after the global financial crisis. And it is exactly what they got.
The crisis was a wakeup call for theorists and policymakers… Economic models, policy tools, and how they are applied need to catch up with changes in the global economic and financial system.
You've heard here about views from the conference, but there's plenty of discussion going on outside the IMF. Here's a snapshot....
- The openness to rethinking the “prevailing macroeconomic policy paradigm”, led Paul Krugman to speculate that IMF might stand for ‘Impressive Macroeconomic Flexibility’. He later talked about what would change his mind about how the economy works.
- While the conference was “interesting and stimulating”, Anders Aslund has concerns that it revealed a division “between the Anglo-American macroeconomic mainstream and the rest of the world.”
- By addressing the big questions, the IMF conference was “trying to stir a reexamination of mainstream macroeconomists’ framework – which largely ignored finance”.
- But how to address financial sector risk is tricky issue. Paul Romer’s presentation resonated with Matthew Yglesias—a rules-based system of financial regulation could simply be a “fixed target for canny bankers to exploit and undermine.”
- Another question posed at the conference—"Does the financial system have social value?"—was one that Floyd Norris thought would not have been asked at the IMF a few years ago.
- Still high unemployment did not go overlooked, but Krugman feels that anyone focusing on it “instead of slashing spending now now now can expect to face harsh attacks, which leads all too many to shy away from the current policy debate”.
- The conference would be “a turning point in mainstream economic debate” according to Perry Mehrling, and the videos would be a "brilliant" ongoing resource for students and academics.
Other conference-related posts:
- Video interview with Robert Solow on New Policy Ideas for a New World
- Observations on the Evolution of Economic Policies, by Michael Spence
- A Balanced Debate About Reforming Macroeconomics, by Joseph E. Stiglitz
- An Important Starting Point—with One Gap, by David H. Romer
- The Future of Macroeconomic Policy: Nine Tentative Conclusions, by Olivier Blanchard
- Rewriting the Macroeconomists’ Playbook in the Wake of the Crisis, by Olivier Blanchard
Watch a video on the conference, New Ideas for a New World: