City Research Online

Abstract

Soon after the Lehman crisis, the International Monetary Fund (IMF) surprised its critics with a reconsideration of its research and advice on fiscal policy. The paper traces the influence that the Fund’s senior management and research elite has had on the recalibration of the IMF’s doctrine on fiscal policy. The findings suggest that overall there has been some selective incorporation of unorthodox ideas in the Fund’s fiscal doctrine, while the strong thesis that austerity has expansionary effects has been rejected. Indeed, the Fund’s new orthodoxy is concerned with the recessionary effects of fiscal consolidation and, more recently, endorses calls for a more progressive adjustment of the costs of fiscal sustainability. These changes notwithstanding, the IMF’s adaptive incremental transformation on fiscal policy issues falls short of a paradigm shift and is best conceived of as an important recalibration of the precrisis status quo.

Publication Type:	Book Section
Additional Information:	© 2015 Emerald Publishing Limited. The version of record can be found here http://www.emeraldinsight.com/doi/full/10.1108/S0733-558X20150000043024
Publisher Keywords:	IMF, staff research, Keynesian, New Consensus Macroeconomics, austerity
Departments:	School of Policy & Global Affairs > International Politics

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