Arnold Kling

Rogoff stands up to Stiglitz

Arnold Kling, Great Questions of Economics
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In January, I explained the situation of the Impossible Mission Fund. They get blamed when the laws of economics catch up to a country.

One of the most irresponsible IMF critics is Joseph Stiglitz, who one a Nobel Prize last year (for unrelated research). Stiglitz, a classic academic bully who thinks his reputation gives him license to voice any random opinion as if it were God's truth, wrote a book that drew a rare denunciation from a fellow academic. Like Joseph McCarthy, Stiglitz may finally have gone too far.

What pushed Ken Rogoff over the edge was Stiglitz suggesting that it was all about the Benjamins for Rogoff's former mentor, economist Stanley Fischer.

On page 208, you slander former IMF number two, Stan Fischer, implying that Citibank may have dangled a job offer in front of him in return for his cooperation in debt renegotiations. Joe, the people in this room know Stan Fischer to be a person of unimpeachable integrity. Of all the false inferences and innuendos in this book, this is the most outrageous. I'd suggest you should pull this book off the shelves until this slander is corrected.

Mr. Stiglitz, sir, have you no sense of decency? At long last, have you no sense of decency?

On the substantive issue of IMF policy, Brad DeLong says that Rogoff is correct. DeLong says,

Following what appear to be Stiglitz's prescriptions--lend more with fewer conditions and have the government print more money to keep interest rates low--seems that it would have been overwhelmingly likely, in all the cases I know well, to end in hyperinflation or in a much larger-scale financial crisis

Discussion Question. Do you think that an economist employs rhetoric and distortions when he is writing something that has a solid, scientific basis?

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