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Saturday, July 19, 2003

Changes at the IMF

I guess you are all sick-and-tired by now with my obsessions about Bulgaria, so this post won't mention the matter further (this is a threat about the future though) other than to say that what my brother once referred to as my tendency towards the 'single minded and relentless pursuit of an idea to its logical end' has both pro's and con's. Among the con's is the fact that you tend to miss out on other details. Reading Damien's excellent blog this morning to catch up a bit on the real world, I find that Rogoff is leaving the IMF. The new Economic Counsellor will be Raghuram Rajan. This is an interesting choice, not only for the fact that he is Indian, but also since his background is in finance, which may tell us something about how people at the IMF may see the global problems and priorities. I can only say that I hope the vast improvement in level of the WEO and other material will continue, and that they will continue to improve. Meanwhile Damien has lots of interesting links on the topic:

The FT last week stressed that Rajan's background was in finance, not macroeconomics, while some Indian commentators have made much of the fact that he is the first Fund chief economist from a developing nation. The imporant thing, though, is that Rajan will be taking office in September in a difficult time for the world economy. How would he approach it? In an interview with the Indian news site Rediff.com Rajan chuckles at an ironic reversal:

I mean the richest country in the world is the biggest debtor while poor countries are lending tremendously to rich countries (laughs). I don't say it is wrong in some ethical way. I am saying it is just funny that this should be the situation in the world economy. The question is how much is enough? It's a sign of some success. If we carry it too far, it will reflect some failure also.

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