In a career spanning four decades, Dr. Mussa published widely on international economics and held prominent roles in academia, financial advisory panels and nongovernmental organizations. He was admired for using levity to explain economic principles and sometimes to castigate colleagues.
“We’ve been forecasting a slowdown in the U.S. economy for a while now,” he once quipped, “and we’ll continue to forecast a slowdown until it happens.”
Dr. Mussa spent much of his early career as a professor of international business at the University of Chicago, a premier center for economic research that hewed strongly to the free-market monetarist tradition of Milton Friedman.
Dr. Mussa described himself as a “wobbly monetarist,” someone who sympathized with but wasn’t doctrinaire about Friedman’s emphasis on managing the economy through adjustments to the money supply rather than adjusting taxes and government spending.
Dr. Mussa won a coveted spot on President Ronald Reagan’s three-member U.S. Council of Economic Advisers, serving from 1986 to 1988. Three years later, he joined the IMF as economic counselor and research division director.
Those titles essentially made him chief economist of the organization, which lends money to countries in financial straits and monitors international economic systems. He oversaw publication of the IMF’s twice-annual projections of the state of the world economy.
Dr. Mussa was at the heart of IMF decision making as the institution responded, often in controversial ways, to economic tumult on nearly every continent. He played a role in rescuing Mexico’s economy after that country nearly defaulted on its debt in 1994. He later defended decisions by the IMF to offer assistance throughout Southeast Asia during the financial crisis that ricocheted from country to country. He later advised on financial aid to Russia, Turkey and Argentina when those economies plunged.
In 1998, Dr. Mussa engaged in a highly unusual public spat with Joseph E. Stiglitz, then chief economist at the World Bank, for what Stiglitz called the IMF’s failure to fully anticipate the East Asian economic disaster. Stiglitz also criticized the IMF for worsening the situation with austerity measures, such as hiking interest rates and tightening budgets so they are balanced.
“Virtually every American economist rejects the balanced budget principle during a recession,” Stiglitz told the Wall Street Journal at the time, saying the IMF reaction would spur further poverty in Asia. “Why should we ignore this when giving advice to other countries?”
