ABSTRACT
The crisis and the IMF’s initial response revealed two important things. First, the new international economic order is unstable and susceptible to financial crashes that carry the risk of global deflation. Second, the IMF is imbued with an economic philosophy that impedes achieving international financial stability and widely shared economic prosperity. This philosophy has given rise to an economic outlook that recommends fiscal austerity, financial liberalization, and export-led growth irrespective of circumstance. Over time, such a policy configuration stands to aggravate the problem of financial instability and trigger global deflation.
