Give Me a Paradigm Shift But Not Yet: Adaptive Change on Fiscal Policy at the International Monetary Fund
37 Pages Posted: 18 May 2013 Last revised: 26 Jun 2013
Date Written: May 17, 2013
Soon after the Lehman crisis, the International Monetary Fund surprised its critics with a recalibration of its research and advice on fiscal policy. But the selective incorporation of Keynesian ideas and rejection of some elements of neoclassical economics that this paper uncovers are very limited and could be seen as part of an effort to reprogram the instruments and settings of neoliberalism for the context of the Great Recession. This paper argues that this limited change was facilitated by the convergence of two factors: growing divisions in mainstream macroeconomics and internal entrepreneurship at the Fund, with the latter process bringing to the fore the importance of staff reshuffles, conceptual layering and methodological framing in both the success and the limits of this revisionist thinking. These findings contribute to the emerging debate on the internal sources of intellectual and policy change in international economic organizations.
Keywords: IMF, fiscal policy, Great Recession, crisis
JEL Classification: E62, F00
Suggested Citation: Suggested Citation