The International Monetary Fund recently endorsed the use of capital controls by governments to avoid asset bubbles. Now it’s backing off a bit, saying such policies could cause distortions in domestic and international markets. International Relations Professor Kevin Gallagher, a specialist in globalization and development who has written about the IMF and capital controls in Foreign Policy magazine, says the IMF is waffling.
“On capital controls the IMF seems to be stuck making one step forward, two steps back. Capital controls are instrument to correct for distortions, not create them.”
Contact Kevin Gallagher, 617-353-9348, email@example.com