Irreverent Economics

I took part in a conference sponsored by the IMF, the government of Iceland and the Central bank of Iceland. The video of my session is here.  My main take from the event is that the only people who were truly happy with the IMF programme were the IMF people themselves, and they don’t seem to have a fully realistic view of either the Icelandic economy or their perception in Iceland.

The IMF staff have an inflated view of their abilities and contribution to Iceland’s recovery along with an ironclad conviction that they are right. Which they are not, as I discuss here.

They seem to have embraced Krugman’s liking of “unorthodox economics” view in their writeup: Iceland’s Unorthodox Policies Suggest Alternative Way Out of Crisis. Its worth noting that the IMF insisted on very orthodox measures, like extreme interest rates, hawking back to their 1997 Asia crisis advice.

Finally, none of the foreign stars in the conference let an almost complete lack of knowledge about Iceland prevent them from making detailed comments about the economic situation in Iceland. Pathetic really.

Tags: iceland

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