Gita Gopinath Appointed IMF Chief Economist
India-born economist and Harvard professor Gita Gopinath will be the new chief economist at the International Monetary Fund.
Gopinath will succeed Maurice ‘Maury’ Obstfeld, who would retire at the end of 2018, the IMF said in a statement on Monday. Gopinath currently serves as the John Zwaanstra Professor of International Studies and Economics at Harvard University.
“Gita is one of the world’s outstanding economists, with impeccable academic credentials, a proven track record of intellectual leadership, and extensive international experience,” IMF Managing Director Christine Lagarde said in a media statement. “All this makes her exceptionally well-placed to lead our Research Department at this important juncture. I am delighted to name such a talented figure as our Chief Economist.”
Gopinath was born and grew up in India. She received her Ph.D. in economics from Princeton University in 2001 after complete earning a B.A. from the University of Delhi and M.A. degrees from both the Delhi School of Economics and University of Washington, IMF’s statement said. She then joined the University of Chicago as an assistant professor before moving to Harvard in 2005, where she became a tenured professor in 2010.
Gopinath’s research work has focused on macroeconomics and international finance and includes issues of current relevance like exchange rate dynamics and border taxes.
Among her recent work, was a 2017 paper on rethinking international macro economic policies. Commenting on exchange rate policy as part of that paper, Gopinath highlighted the challenges of a flexible exchange rate for emerging market economies and analysed the relationship between the dollar and global trade flows.
“Flexible exchange rates provide greater monetary policy independence but its benefits in an open economy environment may not be as large as you think,” Gopinath concluded through her research.
The same paper spoke about the role of the IMF as a lender of last resort. Reserve accumulation and currency swap lines do not substitute for the lender of last resort role of the IMF, Gopinath wrote. “Global coordination of financial regulation is essential along- side country level macroprudential polices,” she added.
In a paper co-authored with Jeremy Stein, published in March 2018, Gopinath once again examined the relationship between banking, trade and the dominant global currency. The issue has remained one of considerable debate among global economic circles as the dominance of the U.S. dollar remains unchallenged, despite attempts to strength alternative reserve mechanisms like the IMF’s SDR basket.
The 2018 paper found that a currency’s role as a unit of accounting for invoicing decisions is complementary to its role as a store of value.
“This complementarity can lead to the emergence of a single dominant currency in trade in- voicing and global banking, even when multiple large candidate countries share similar economic fundamentals,” the paper explained. The paper went on to add that emerging economies often end up with currency mismatches by borrowing in the dominant currency.
Other recent papers include studies on border taxes and capital allocation and productivity in South Europe.
Gopinath has also co-authored a handful of books on international economics with peers like Ken Rogoff and Maurice Obstfeld. At Harvard, Gopinath teaches classes in international economics, finance and macro economic policy. She is currently the co-editor of the American Economic Review and co-director of the International Finance and Macroeconomics Program at National Bureau of Economic Research in U.S. Gopinath also acts as an economic adviser to the Chief Minister of Kerala.
Not a frequent commentator on the Indian economy, Gopinath in interviews to publications in December 2017 had noted that the government’s demonetisation plan was not macroeconomically sound. She, however, supported reforms like GST and bankruptcy code, she told Hindu Businessline in an interview in December 2017.