The real news of WEO is lower growth in EE

IMF us usually the last to adjust it forecasts closer to reality. Historically its forecasts beyond 6 months are wrong and always biased on the upside. Thus, I ignore them. But the 3 to 6 months ahead are fairly close to final outcome.

IMF wants personal bankruptcy law in Hungary but not in Romania. Why?

Few weeks ago I wrote a post about the benefits of personal bankruptcy law for the Romanian economy. At that time I was told that it IMF told Romania not to introduce such a law.  Here is what protfolio.hu says IMF is asking Hungary to do to get a credit line:

Greek lessons for EC, IMF and Romanian policy makers

The main problem with European policy makers is that they did not have a Great Depression. At that time, 1930s, individual countries were hit by global recession but the magnitude for the European economy was not considered.  As a consequence they did not have any interest in studying it. Anglo-Saxon economists have spent decades to understand the policy errors that after the initial market crash pushed the economy further into recession. The main and only conclusion from those studies is that monetary policy has to remain loose or at least to keep growing at the previous pace. But that is just to keep the economy from going deeper into recession. There is still no consensus on how to pull an economy out of recession – fiscal stimulus, further monetary stimulus, allow the economy to correct itself etc.