Gestalt flip or gestalt flip-flop? The impact of the Great Crash on fiscal policy assumptions in the IMF

Abstract

This paper contributes to ongoing debates surrounding the impact of the Great Crash on change or continuity in fiscal policy assumptions in the IMF, and in doing so, foregrounds two variables that have been given short shrift in the existing literature: the multiple levels of economic ideas; and the dynamic, evolving, multi-phase nature of moments of political-economic failure. Drawing on this nuanced appreciation of the complexities and dimensions of moments of uncertainty, the central argument of this paper is that notwithstanding the beginnings of a potential gestalt flip during the most acute phase of the Great Crash, the IMF nevertheless remains a long way from jettisoning prior orthodoxies, despite some evidence of inter-paradigm borrowing in response to concerns of secular stagnation in advanced economies.

Keywords:

• economic ideas
• Great Crash
• IMF
• fiscal policy
• phases of the Crash

Acknowledgements

The author would like to thank Matt Matthew Bishop and four anonymous reviewers for particularly insightful comments on an earlier draft of this paper.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Gary Lowery

Gary Lowery is a University Teacher in International Political Economy and International Relations at the University of Sheffield. His research work, which includes the political economy of financial crises, global economic governance and constructivist political economy, has most recently been published in Evidence and Policy and Global Society.