Jayati Ghosh Says More…

Project Syndicate catches up with Jayati Ghosh, Professor of Economics at Jawaharlal Nehru University in New Delhi and Executive Secretary of International Development Economics Associates. 

Project Syndicate: In your latest PS commentary, you criticize the International Monetary Fund’s apparent belief in “expansionary austerity.” In the case of Ecuador – where you foresee IMF-imposed austerity leading to a growth slowdown – how could the current loan agreement be improved? Is it simply a matter of extending the timeline for fiscal consolidation, or do you think the IMF should actually be making the opposite demand: fiscal stimulus?

Jayati Ghosh: For Ecuador (and Argentina), two imperatives are abundantly clear: external debt must be restructured, and debt repayment must be enabled through economic growth, rather than wage suppression and fiscal consolidation.

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(This article was originally published in Say More, a weekly newsletter that brings Project Syndicate’s)