I am travelling to the US and UK to discuss my ideas on monetary policy with some of the best economic minds in the world, including former World Bank chief economist Joseph Stiglitz, Harvard academic Jeffrey Frankel and IMF chief economist Olivier Blanchard.
Olivier Blanchard says:
Overvaluation of exchange rates “can be very damaging and we can need interventions to deal with such outcomes”
We “need a twist to monetary policy”
Friction in the wheels of capital flows make exchange rate interventions work better
Our third to last meeting was with Olivier Blanchard, Chief Economist at the IMF.
If any further evidence is needed of how far the world has moved on as a consequence of the limitations and side effects of inflation targeting exposed by the GFC, then writing out of the IMF since should suffice.
The most senior of economists in powerful positions write and talk in accessible language. They don’t use jargon as a barrier to discussions and are genuinely interested in our experiences, as well as interested in offering their own views.
Olivier Blanchard is one such man. He is both erudite and engaged. He was taking notes, as we were.