Quick post here to continue the theme of Christine Lagarde doing a complete makeover of the IMF. Yesterday, the Financial Times reported on an IMF staff paper that accepted capital controls as a necessary evil in specific cases, a sharp contrast to the liberalisation dogmatism that characterised IMF policy views during the 1990s. The paper does speak to the need to make controls "targeted, transparent, and generally temporary". Nonetheless, I believe this is a significant policy shift that will have wider implications down the line.
The FT article focuses mostly on the currency wars and Brazil's finance minister Guido Mantega's position that the Federal Reserve's zero rate policy and quantitative easing are creating significant problems for the Brazilian economy. In October, Mantega admit...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.