Joe Stiglitz and the IMF have warmed to each other

FEW JOBS are as daunting as minister of the economy of Argentina. But Martín Guzmán, who was given the post in December, has two things going for him. He is a brilliant student of unsustainable debt, which Argentina has in abundance, including $44bn owed to the IMF and almost $100bn of foreign-currency debt owed to private lenders. And he is a protégé of Joe Stiglitz, a Nobel-prizewinning economist at Columbia University who once served as chief economist of the World Bank.

That close affiliation presumably helped endear him to Argentina’s powerful vice-president, Cristina Fernández, who flouts economic orthodoxy but is fond of citing Mr Stiglitz. And the celebrated economist’s warm endorsement also gave Mr Guzmán credibility in his dealings with the IMF—or so the government must have hoped when it appointed him.

But the neat logic of his appointment surely suffers from an obvious flaw. Mr Stiglitz is admired as an economic theorist, but is also renowned as a bitter critic of the IMF. His book, “Globalisation and its Discontents”, published after the emerging-market crises from 1997 to 2001, castigates the fund for imposing unfettered capital flows, fiscal austerity and tight money on vulnerable countries. In a notorious passage, he speculated that Stan Fischer, a revered economist who was the fund’s second-in-command...



via The Economist: Finance and economics Business Feeds

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