Monday, January 31, 2022

IMF Bailouts and Moral Hazard

January 24, 2022 by Dan Mitchell @ International Liberty

One of the (many) unfortunate tendencies of politicians is that they focus on the short run (i.e., their upcoming reelection battles).  Why is this unfortunate? Because there are some policy changes that may be costly in the short run, but they are nonetheless very worthwhile because they generate big long-run benefits.

I offer the above examples because similar short-run and long-run tradeoffs exist when looking at what happens when the International Monetary Fund provides bailouts for profligate governments.  The Economist has an article that perfectly illustrates the IMF’s pernicious role......To Read More.....


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