I'll blog again when I finish reading the paper which runs to some 100 pages but it's worth highlighting some early thoughts:
- the IMF contribution provides further evidence of the organisation's shift away from Washington Consensus orthodoxy. The policy conclusions derived from their analysis of the causes and impacts of the Great Recession are striking. Consider this...'Rebalancing will require policy shifts in both surplus and deficit countries to support the growth of productive employment, together with a broad-based growth of wage and household incomes. This means developing mechanisms to ensure the gains from rising productivity are widely distributed in the form of increasing wages and improved social protection systems'. Or this...'Public employment or public works programmes targeting depressed communities and vulnerable groups can be effective and socially and economically justified'. Can't imagine pre-crisis IMF endoring such policies;
- given that the Great Recession was a truly global event, the differences in labour market policy and performance are startling. Spain has seen unemployment increase by nearly 10% points (youth unemployment is close to 40%) but Germany has seen a small decrease. As Larry Elliott notes in yesterday's Guardian, the rise in unemployment and slow labour market recovery is particularly pronounced in the USA; home of the dynamic, flexible labour market. (an aside - in a meeting with senior Scottish and UK Ministers in Sept '09, I recall a senior Scottish employer representative mockingly dismiss my observations on the performance of German and US labour markets during the crisis. Of course the US market would recover quickly he told us. Inevitable. Yep.);
- as the title suggests, the IMF paper is very strong on why high unemployment is such a disaster: for the individual(particularly the young), comunity and economy. These arguments cannot be stressed often enough.