The IMF goes radical?

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An IMF working paper has received a lot of attention recently – and not for the usual reasons. Whereas the IMF is usually criticised for being dogmatic about free market economics and effectively beholden to the banks, this paper is being both praised and criticised for wanting to radically reform them.

This clearly isn’t official IMF policy, but the fact that it has been released by the IMF is noteworthy, and the paper deserves careful attention. It is an enormous paper, not just in length (56 pages of text) but also in the range of topics covered, and it will take at least three posts to do it justice. In this one, I’ll focus on its analysis of today’s monetary system.

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About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.
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6 Responses to The IMF goes radical?

  1. Mich says:

    “Money and additional spending power has been created pari passu with additional bank debt. Impatient’s spending power has risen, without any offsetting fall in patient’s spending power.”
    Dream’n! Of course the savers spending power falls (by raising prices), only to be returned when the loan is payed back or an investor takes the loss on the loan when defaulted on (falling prices, oh no! deflation!).
    You guys don’t see this? Really?

  2. richard hodge says:


    The link aint working for me, which is a shame cos I really want to hear your opinion on this paper

  3. Nebbiolo71 says:

    The full link is here:

    By the way Steve, you did a wonderful job in Swedish television (broadcasted yesterday) when you raised the question about the importance of private debt, money and banks and the failures of mainstream economics – it will certainly start a lot of discussions all around the political and economic establishment!

    The journalists also told us that you and Bezemer were given some data on the swedish debt bubble but unfortunately your opinion didn’t really get to the viewers.

  4. Ralph37 says:

    That IMF paper is rubbish. As regards the idea that national debts can be written off by printing money and buying back such debt, that’s not original: I’ve been making that point on my blog for two years now (as have others). Indeed that sort of debt buy-back has been taking place on a MASSIVE scale and under the guise of QUANTITATIVE EASING. Perhaps they haven’t heard of QE.

    As regards the idea that we can just print loads of money and use it to write off a significant proportion of private debts, the effect would be a massive rise in private sector net financial assets, which in turn would result in rampant inflation (assuming the economy is initially at capacity).

  5. Pingback: Anti-Bernanke Keen lauds IMF authors’ paper on changing banking

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