Blanchard and Summers call for rethink of stabilisation policy

Both economists question consensus on fiscal prudence and advocate stricter financial regulation

Olivier Blanchard, former IMF chief economist

The macroeconomic consensus on fiscal prudence and contained inflation is not adequate to fight the challenges the world economy faces now, and will encounter over the next decades, according to two leading economists.

The idea is put forward by Olivier Blanchard, former chief economist at the IMF, and Larry Summers, former US Treasury secretary, in their joint research paper Rethinking Stabilization Policy. Back to the Future.

The authors, who presented their work at the Peterson Institute in

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