Even the IMF—the IMF!—Turns on Neoliberalism

New paper by three IMF economists finds that policies of capital account liberalization and austerity fuel inequality, which in turn hurts growth—"the very thing that the neoliberal agenda is intent on boosting."

by Andrea Germanos, staff writer

In what may be a sign of a "shifting zeitgeist," a new paper published this week by economists with the International Monetary Fund questions the very neoliberal policies the body has imposed.

Entitled "Neoliberalism: Oversold?" the IMF's Jonathan Ostry, Prakash Loungani, and Davide Furceri focus their analysis on two policies of what British writer George Monbiot dubbed the "zombie doctrine": "removing restrictions on the movement of capital across a country's borders (so-called capital account liberalization); and fiscal consolidation, sometimes called 'austerity,' which is shorthand for policies to reduce fiscal deficits and debt levels."

An evaluation of these two neoliberal policies, the authors write, leads to "three disquieting conclusions."