Goodbye Washington Consensus?

The Chief Economist of the International Monetary Fund (IMF) has co-authored a paper calling for countries to raise their inflation targets from 2 percent to 4 percent and pursue counter cyclical fiscal policies…

The Washington “Consensus” of tight monetary policy and fiscal austerity is no longer. Following failure in the East Asian Financial Crisis, and with advanced industrial countries now turning to the IMF, those favoring weak conditionality and expansionary policies are now carrying the day at the IMF. There will be a price to be paid for expansion, and the debate over conditionality and moral hazard is certainly not over. But when the dust settles, we will have a very different looking IMF.

That is Jim Vreeland at his new blog, Vreelander (which, if you know him, is a perfect name).

Jim’s a Georgetown prof, and a former colleague. When I first interviewed at Yale, Jim took me joy riding in what I can only (politically incorrectly) describe as a pimped out black Cadillac with the trunk replaced by what I assume to be a 100lb subwoofer.

You know, just like all those other political scientists that study the IMF.

Check out the blog, which is disappointingly less pimped out than the Caddy. It’s still early, though…