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Jul 20th 2015, 15:22 by THE ECONOMICS TEAM | LONDON
NEWS has just come through that Maurice Obstfeld will be the International
Monetary Fund's new chief economist, succeeding Olivier Blanchard who is
retiring. According to those in the know, Mr Obstfeld was chosen from an
exceptionally strong field of candidates, which is a tribute to the role Mr
Blanchard has played. Mr Obstfeld ("Maury" to his friends) has both academic
experience (he is a professor at the University of California, Berkeley) and
policy chops (he is on Barack Obama's Council of Economic Advisers, where
apparently he has done a lot of good work).
To most economists he is known for his "Foundations of International
Macroeconomics", a go-to textbook for master's students on macroeconomics
courses that he wrote with Kenneth Rogoff of Harvard University. Perhaps
unsurprisingly, Mr Rogoff told The Economist that it was "a great appointment".
So what should we to expect from Mr Obstfeld's tenure? At this stage we can
only speculate. He has written on how the establishment of the euro zone led to
overlending from the core to the periphery. In a lecture in 2013 he seemed
sceptical of the benefits from growth in global finance, saying that "the
global crisis has highlighted questions about potential negative externalities
from financial markets".
What is clear is that living up to Mr Blanchard will be difficult. One insider
remarked that while Mr Obstfeld should do "much better than his co-author
Rogoff did as Director at the Fund in terms of getting good results [and]
influencing the Board...no one is Blanchard. Any economist in the world would
have a huge gap to do even part of what Blanchard accomplished."