The IMF has imposed significant surcharges on countries that have had to undertake large borrowings and are unable to pay their debts back quickly. These surcharges are pro-cyclical financial penalties imposed on countries precisely at a time when they can least afford them. They worsen potential outcomes for both the borrowing country and its investors, with gains accruing to the IMF at the expense of both. This transfer of resources to the IMF affects not just the level of poverty, health, education, and overall well-being in the country in crisis, but also its potential growth.
Capitalism contains many dysfuntional incentives – ones that constrain innovation and encourage rent-seeking. Read here
Economic policy is not made by a meritocracy in which the people with the best ideas get the most say. Nor of course is it a democracy in which we all have equal say. Read […]
This post contains new information on Nordhaus’s distortion of Lenton et al.’s 2008 paper on tipping elements in the Earth’s climate, but is otherwise very similar to my recent paper in Globalizations. It is a […]