At this rate, it's going to be a very long week end indeed.....
Friday October 2, 8:13 pm Eastern Time
Feud between economists at World Bank, IMF boils over
WASHINGTON, Oct 2 (Reuters) - A feud between top economists at the World Bank and the International Monetary Fund boiled
over this week, exposing a rift between sister institutions on policy advice to Asia's crisis-hit economies.
IMF chief economist Michael Mussa launched the first salvo on Wednesday, when asked if the fund made policy mistakes in
Indonesia, South Korea and Thailand.
''I think those who argue that monetary policy should have been eased rather than tightened in those economies are smoking
something that is not entirely legal,'' Mussa told a news conference, without mentioning any names.
When asked on Friday about Mussa's remarks, World Bank chief economist Joseph Stiglitz shot back.
''I wasn't even smoking,'' Stiglitz told reporters. ''He hasn't looked at the econometric evidence and statistical evidence on this ... We go through both the theory and the
evidence on the issue and you'll see that Mr. Mussa's wrong.''
The IMF has taken some heat from Stiglitz and other economists over the last year for its policies in Asia.
The IMF initially urged the one-time tiger economies hit by the crisis to raise interest rates and run budget surpluses. But the IMF has eased those demands in recent
months, clearing the way for more social spending for the poor.
The rift between sister institutions became obvious in January, when Stiglitz told the Wall Street Journal: ''You don't want to push these countries into severe recession.
One ought to focus ... on things that caused the crisis, not on things that make it more difficult to deal with.''
In March Stiglitz said the IMF had ''overstepped the bounds'' by insisting in its reform program for South Korea that the nation's central bank focus exclusively on price
stability. |
