Third, the opposite concern (voiced by Joe Stiglitz among others) is that inflation-targeting central banks will prove to be “inflation nutters” in the post-crisis environment. 4 We are portrayed as obsessed with a narrow inflation target while the economy burns. But in the post-crisis environment of deficient demand, preventing the economy from burning is entirely consistent with preventing inflation from falling below the target.
In gradually developing a flexible set of rules for granting relief on inter-governmental debts, mostly the debts of developing countries, the Club has made a major contribution to the orderly operation of the international financial system. The principle of conditionality is critical.