In October, IMF Managing Director Christine Lagarde announced the appointment of Gita Gopinath as the Fund’s chief economist, to begin at the start of 2019. The Fund will join the OECD and World Bank in having a woman in a top economic position. Despite the apparent progress on this front, only 25.2 per cent of the Fund’s ‘B-level’ economists are women (see Observer Summer 2018). She will succeed Maurice Obstfeld, who announced in July he would retire at the end of 2018.
Gopinath is currently John Zwaanstra Professor of International Studies and Economics at Harvard University. She is also co-editor of the Handbook of International Economics with former IMF chief economist Kenneth Rogoff.
Gopinath’s previous stance on exchange rates is considered unorthodox for the IMF. According to the Financial Times, “her research has shown that…export flows are quite unresponsive to exchange rates.” It also highlighted that regarding the 2008 crisis, Gopinath’s research showed that, “low interest rate environments hurt productivity and led to misallocated resources.”
Research at the IMF has systematically been ahead of conditionality – I look forward to the day when Prof. Gopinath convinces the IMF board to take her research seriously and have program countries, say like Argentina, use capital controls as part of an IMF SBA.Daniela Gabor, University of West England
Gopinath’s position on exchange rates as the Fund’s chief economist will be met with intrigue by civil society groups, many of whom have traditionally criticised the Fund’s opposition to capital controls as the solution to protect economies when capital inflows pose a systemic risk (see Observer Spring 2016 and Update 81, 83). The Fund’s research department, which Gopinath will become head of, however, accounts for only “around 3% of total staff and produces only about a fifth of the total research output.” The reality of how Gopinath’s non-traditional views will influence IMF’s policies remains to be seen.
Professor Daniela Gabor, from the University of West England Bristol, noted, “Prof. Gopinath’s appointment is a step in the right direction. The IMF now has a chief economist that studies macro-finance, asking critical questions about the impact of real and financial globalisation… Research at the IMF has systematically been ahead of conditionality – I look forward to the day when Prof. Gopinath convinces the IMF board to take her research seriously and have program countries, say like Argentina, use capital controls as part of an IMF stand-by arrangement.”