So Ritchie sees an IMF report

The appreciation that neoliberalism is not just failing but has failed is growing, and I welcome that.

And what does the report itself say?

There is much to cheer in the neoliberal agenda. The expansion of global trade has rescued millions from abject poverty. Foreign direct investment has often been a way to transfer technology and know-how to developing economies. Privatization of state-owned enterprises has in many instances led to more efficient provision of services and lowered the fiscal burden on governments.­

They seem to like it quite a lot actually.

However, there are aspects of the neoliberal agenda that have not delivered as expected. Our assessment of the agenda is confined to the effects of two policies: removing restrictions on the movement of capital across a country’s borders (so-called capital account liberalization); and fiscal consolidation, sometimes called “austerity,” which is shorthand for policies to reduce fiscal deficits and debt levels. An assessment of these specific policies (rather than the broad neoliberal agenda) reaches three disquieting conclusions:

Ah, they’re not talking about neoliberalism at all then. Rather these two specific policies. And that capital account liberalisation which Ritchie insists is really all about tax havens:

This indeed turns out to be the case. The link between financial openness and economic growth is complex. Some capital inflows, such as foreign direct investment—which may include a transfer of technology or human capital—do seem to boost long-term growth. But the impact of other flows—such as portfolio investment and banking and especially hot, or speculative, debt inflows—seem neither to boost growth nor allow the country to better share risks with its trading partners (Dell’Ariccia and others, 2008; Ostry, Prati, and Spilimbergo, 2009). This suggests that the growth and risk-sharing benefits of capital flows depend on which type of flow is being considered; it may also depend on the nature of supporting institutions and policies.­

In fact, that FDI through a tax haven is beneficial.


11 thoughts on “So Ritchie sees an IMF report”

  1. Why do you spend such a lot of time giving Murphy so much free publicity? Is there a personal vendetta going on that we don’t know about? He’s certainly got you by the short and curlies. He’s read the Art of War and you haven’t. Maybe you could ration yourself to one response a week and instead devote yourself to those deliciously wry comments of yours on economic life and life in general.

  2. You Forbes article on the IMF paper is no 1 on google news Timmy. Well done! (google UK, but so what).

  3. ‘But the impact of other flows . . . seem neither to boost growth nor allow the country to better share risks with its trading partners’

    So fucking what? If I invest in a Canadian silver company, I couldn’t care less if it boosts Canadian growth or allows Canada to better share risks. Ritchie reveals his government-centric – statist – view.

  4. Is there a personal vendetta going on that we don’t know about?

    Only if you are new here.

    Apart from the public service aspect of having a refutation or, where there isn’t actually anything that can be refuted, a denunciation of the LTHD’s current stupid idea (which is often logically, legally and morally inconsistent with his last, or another very recent, stupid idea), it all dates back (iirc) to a certain claim to be the UK’s No 1 economics blogger.

  5. My only comment on the Murphy v Worstall spat, which I consider to be wholly legitimate and indeed something of a public service is that the category heading Ragging on Ritchie is not particularly attention grabbing.

    if it were my blog, I would have a category heading along the lines of

    Garbage pseud-economics from the fat cretinous lying Murphy-cvnt

  6. “Garbage pseud-economics from the fat cretinous lying Murphy-cvnt”

    You missed the ‘evil’ part of fat, cretinous lying cunt. Because he really is, and I regard Tim’s relentless mocking of him a profoundly noble public service.

  7. Ritchie’s blog posts are like a daily puzzle in a newspaper – there’s two parts to them. Firstly you have to figure out what he’s trying to say without being put off by the exceedingly difficult sentences following the phrase “let’s be absolutely clear on this”. Secondly you have to figure out why what he is saying is wrong.
    It’s a healthy intellectual exercise with some comedic personal abuse imv.

  8. Mr Marsh, the truly interesting thing comes from identifying what is 180 degrees adverse to his column of the previous day /hour/minute

  9. Mister Bean: the previous day’s rantings are usually a good place to start, from what I’ve heard.

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