Posted by: CJ | April 1, 2009

Seemed too simple…

Simon Johnson, an MIT professor and former IMF Chief Economist, has an article at the Atlantic about the current financial crisis. It’s interesting. It also sounds nice to everyone with a deep believe that the elites are all have a wonderful time using governmental power to screw over everyone else.

However I was very confused reading it. The article focuses on a number of parallels with experiences the IMF has had in the past several decades. But I’ve read a number of things in the past few years that were extremely critical of the IMF and the World Bank. (I believe that many of them were by Dani Rodrik and Joseph Stiglitz, who are hardly mainstream economists. But I found their arguments compelling, despite their lack of broad acceptance.) I wasn’t sure why this article should make sense if the IMF had made as many mistakes as were implied in the articles I read. I was hoping someone with more credentials would weigh in on the matter.

Thankfully, Dani Rodrik has weighed in on the matter. Sorta. He notes that, in his opinion, the IMF has indeed made too many mistakes for the comparisons to be flattering. And that the story told by Prof. Johnson is more of a morality tale than a careful analysis. But Prof. Rodrik doesn’t say much more. I wish he did so I had a better clue of the objections that could be raised to the Atlantic piece. Oh well…

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