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IMF chooses its first female chief economist – Gita Gopinath

BY AL EDWARDS
Observer writer

Sunday, December 16, 2018

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THE IMF has chosen Harvard Professor Gita Gopinath to succeed Maurice Obstfeld (who will be retiring at the end of this year) as its chief economist and Director of the IMF's Research Department.

She begins her new role in January 2019.

Gopinath who is 47 and married, was born in India and is a US citizen. She is the IMF's first female chief economist.

On her appointment, Managing Director of the IMF Christine Largarde said: “Gita is one of the world's outstanding economists with impeccable academic credentials, a proven track record of intellectual leadership and extensive international experience.

“All this makes her exceptionally well placed to lead our Research Department at this important juncture. I am delighted to name such a talented figure as our chief economist.”

After completing a BA from the University of Delhi and an MA from both the Delhi School of Economics and the University of Washington, she studied for her doctorate at Princeton under Ben Bernanke who would later become the chair of the US Federal Reserve.

She joined the University of Chicago in 2001 as an Assistant professor before moving to Harvard in 2005. There she served as the John Zwaanstra Professor of International Studies and Economics.

Gopinath has served as the co-editor of the prestigious American Economic Review and also as the co-editor of the Handbook of International Economics. In 2011 she was chosen to be the Young Global Leader by the World Economic Forum and in 2014 she was named as one of the top 25 economists under 45 by the IMF.

With such bona fides and such impeccable academic credentials some could assume her parents are scholars or top educational professionals – hardly. Her father is a farmer and her mother a home-maker.

She assumes her new role at the IMF when the world finds itself in turbulent times. The United States is becoming more insular and is abdicating its position as the world's policeman and economic leader. Then there is Brexit and the fracturing of the EU. There is also tariff wars, the continued rise of China as a world power gathering geo-political tensions and many are predicting an imminent global recession.

Closer to home, the Caribbean is beset by falling commodity prices, income inequality and continuing low economic growth.

This year Jamaica saw the volatility experienced in the exchange rate and was told that a weaker currency should boost exports. Both the governor of the Bank of Jamaica and the minister of finance have extolled the virtues of a flexible exchange rate.

Gita Gopinath doesn't quite see it that way and questions that thinking.

“Gains to flexible exchange rates are less than you think,” she has said. She argues that in most instances trade is invoiced in US dollars and so goods and services are not that much cheaper, hence the need to have stronger currencies that can get close to the greenback. In other words, export flows are irresponsive to exchange rates while imports drop due to a lack of purchasing power in US dollars or currencies close to it.

She is of the view that emerging economies (like Jamaica) would be wise to move away from dollar denominated debt and that the global recession of 2008 showed that low interest rates can impact productivity.

The incoming IMF chief economist is an advocate of global co-ordinated financial regulations.

One of her predecessors, Olivier Blanchard, said that she will be responsible for ensuring that the IMF's decisions are based on “solid theoretical and empirical grounds”.

Senior Fellow at the Brookings Institution, Eswar Prasad speaking with the Financial Times said: “Gita is a thoughtful and accomplished economist with the intellectual gravitas to push the IMF's analytical work in new and interesting directions. She is a worthy successor to a long line of distinguished economists who have led the IMF's research department.

“Her intellectual acumen will help the IMF better guide its member countries, especially developing countries, to deal with the complex economic and social challenges wrought by globalisation.”


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