Earlier this week, I wrote that people should stop blaming the International Monetary Fund for everything, because they had become the economic "good guys"—anti-austerity, pro-redistribution, and pro-inflation—since the financial crisis hit. I negatively contrasted them with the Organization for Economic Cooperation and Development, which thought that was unfair. Here's its response:
Matt O’Brien mischaracterizes in a recent blog post (‘Stop blaming the IMF for everything’, post on Wonkblog, 14th May 2014) the Organisation for Economic Cooperation and Development (OECD) as having “been busy inventing reasons to ignore textbook economics and tighten policy despite high unemployment and low inflation”.
Mr. O’Brien may not be familiar with the OECD’s work distilling the lessons of the financial crisis. We are helping to update “textbook economics” for a new global landscape, one that is more interconnected and complex than ever before.
The OECD has always been deeply concerned about growth and jobs. During the crisis, it called for both monetary and fiscal stimulus in economies where this was feasible. It cautioned against excessive fiscal tightening in the euro area where countries’ growth disappointed. And in Greece specifically, Secretary-General Gurria called for further reductions in the government debt burden if growth disappoints and he provided a large team on the ground in Athens to work with the Greek authorities to help reduce the administrative burden and stimulate competition so as to support productivity improvements.
Through its Inclusive Growth initiative, the OECD is at the leading edge of identifying policies that ensure all members of society can benefit from economic growth and experience sustained improvements in their well-being.
Ultimately, judging the success of economic policy is not a numbers game – it’s about people sharing in the benefits of economic growth and living better lives. On this, I suspect Mr. O’Brien and the OECD agree.
Director, Policy Studies Branch
Economics Department, OECD