From Volcker to Volcker: IMF Monetary Policy Doctrine and Practice.

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Abstract

How did the International Monetary Fund (IMF)’s monetary policy change between the Great Moderation and the transformative processes that followed the Great Recession? This chapter suggests that monetarism inspired some of the Fund’s monetary policy thinking during the Great Moderation. During the 2000s, the intellectual bases of this orthodox monetary policy became eroded, with the Great Recession pushing for revisions in the entire macro-financial framework. The pandemic reinforced this revisionism but the inflationary crisis of 2022 seems to have brought about a return to monetary orthodoxy. Key to all these transformations has been the Fund’s strategy to highlight both continuity and change while reserving the jurisdiction to define the resolution of the policy trade-offs that emerge along the way.
Original languageEnglish
Title of host publicationThe Oxford Handbook of the International Monetary Fund
EditorsMark Hibben, Bessma Momani
Number of pages19
Place of PublicationOxford
PublisherOxford University Press
Publication date2024
Pages301–319
Chapter16
ISBN (Print)9780192858405
ISBN (Electronic)9780191949203
DOIs
Publication statusPublished - 2024

Keywords

  • IMF
  • Monetary policy
  • Strategic ambiguity
  • Constructivism
  • Great Moderation
  • Great Recession

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