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The International Monetary Fund and its new economics
Gabor, D. (2010) The International Monetary Fund and its new economics. Development And Change, 41 (5). pp. 805-830. ISSN 0012-155X Full text not available from this repository Publisher's URL: http://dx.doi.org/10.1111/j.1467-7660.2010.01664.x AbstractThis paper focuses on a key element of the IMF’s agenda for change: the repackaging of its economics of crisis around inflation targeting. It examines how this new policy regime redefines the political economy of the IMF’s policy advice, and contextualizes it by focusing on Eastern Europe, the region worst affected by the global financial crisis which began in 2007. The paper compares the conditionalities designed under the new and old policy regimes and argues that the mainstreaming of inflation targeting reproduces the IMF’s function within a neoliberal political economy. It points to a difference in the manner in which models inform policy advice, depending on the IMF’s role in the policy process. During ‘normal’ times, models engender a contractionary bias that favours speculative capital. When acting as ‘lender of last resort’, the IMF retains the traditional emphasis on fiscal contractions, paying but lip service to its new economics of crisis while further ignoring crucial questions of macroeconomic policy coordination or the destabilizing potential of short-term capital inflows
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