Typical street scene in Santa Ana, El Salvador. (Photo: iStock)
May 11, 2007
Simon Johnson, the incoming head of the IMF's Research Department, says he plans to improve the quality and relevance of Fund research.
Johnson on IMF research: `We need to be plugged into issues that matter to the IMF's 185 member countries' (photo: Eugene Salazar/IMF)
ANALYZING SPILLOVERS
"We need to be plugged into issues that matter to the IMF's 185 member countries," Johnson said in an interview with the IMF Survey. "They all want global stability and it is our job is to help deliver that ... by examining potential threats and through help on the analytical side."
The IMF's World Economic Outlook (WEO), which includes forecasts for the global economy, always gets a lot of attention. But the IMF's research agenda goes much beyond the WEO, as our linked overview of five recent working papers attests.
Improving the quality and relevance of IMF research and positioning the Fund as a leading expert on data will be important challenges in the years ahead, Johnson said. The IMF has traditionally has been very strong on macroeconomics. In contrast, finance played only a minor role when the Fund was established back in 1945. Now that capital flows have become central to economic development, Johnson wants to use his new role as Economic Counsellor and head of the IMF's Research Department to "help the IMF develop its analytical tools for understanding the relationship between finance and macroeconomics."
Spillover effects
Data is another issue that matters to Johnson. "The IMF is already a leading expert on data around the world but we could do even more to develop that aspect of the Fund's work," Johnson said. "When someone has a question about a data series or wants to know what are the right numbers to look at to understand either today's situation or likely medium-term scenarios, I would like them to turn to the IMF," he says.
According to Johnson, the IMF should also seek to better exploit the advantage its near-global membership gives it in terms of its ability to analyze spillover effects. "The Research Department has always been central to what we call multilateral surveillance—looking at issues that span many countries and then digging into particular countries and determining whether there is a potential for spillover effects. I expect the Research Department to do more cross-country work in the future," Johnson said.
But he also warned that it may take some time for this type of research to trickle down to the IMF's advice to individual member countries. "We will try to make it as relevant as possible to operational issues. But sometimes you have to do research for a couple of years before you come out with something that is really practical and useful."
