Maurice Obstfeld and the IMF push structural reforms

Spot the difference

The new World Economic Outlook (WEO) is out, now under the direction of Maurice Obstfeld, after the retirement of Olivier Blanchard. They suggests many reason for why the global economy has been Too Slow for Too Long, as the title of the report indicates. In the forward Obstfeld tells us that part of the solution would be to promote:

"structural reforms in product and labor markets [since this] can be effective in boosting output, even in the short term, and especially if coupled with fiscal support. Tax reform, even when budget neutral, can create demand if well targeted, while simultaneously improving labor force participation and enhancing social cohesion."

So the idea is to liberalize labor markets, and reduce the costs of hiring labor (wink, wink, nudge, nudge, they mean reduce benefits).

So this pretty much confirms that nothing much has changed at the IMF. For more go here.