Maury Obstfeld this month completes his exemplary term as Chief Economist at the International Monetary Fund. His departing economic outlook foresees slowing growth in the world economy in 2019 and 2020.

Gita Gopinath, my Harvard colleague, will take up the position in the new year.  (Technically the title is Economic Counsellor and Director of the Research Department.)

In the last three decades there have been 8 Economic Counsellors of the IMF.  As it happens, every one of them has been a Research Associate of the NBER, specifically the NBER Program in International Finance and Macroeconomics:

Jacob Frenkel  1987-1991
Michael Mussa August 1991 – 29 June 2001
Kenneth Rogoff August 2001 – September 2003
Raghuram Rajan September 2003 – January 2007
Simon Johnson March 2007 – 31 August 2008
Olivier Blanchard 1 September 2008 – 8 September 2015
Maurice Obstfeld 8 September 2015 – 31 December 2018
Gita Gopinath 1 January 2019 –

A few words on Professor Gopinath’s research.  Early in her career, probably her single best-known paper was “Emerging Market Business Cycles: The Cycle Is the Trend” (co-authored in 2007 with Mark Aguiar).  It addressed the phenomenon that capital appears to flow into EM countries in boom times and out in economic downturns. Many of us thought that this pro-cyclicality was evidence of excessive volatility in capital flows; but their paper did an impressive job of rescuing standard theory by pointing out that some EM booms are not transitory but rather signal a higher trend rate of growth.

In recent years she has pursued an important and influential new line of research on “dollar dominance.”   While the role of the dollar as premier international currency is of course well-known, our macroeconomic models had largely ignored the fact that most trade – even non-US trade — is denominated in the dollar, rather than in either the currency of the exporting country or the currency of the importing country.  Gita has forced us to confront this fact and has pointed out some possible macroeconomic implications that had not occurred to others.

Scholars in many academic disciplines never get to find out whether their ideas can be implemented in the real world.  Economics is different in this respect.  The economists who have held the IMF position in the past have been outstanding international scholars who then went on successfully to exhibit a broader set of real-world skills in this important role.  Gita Gopinath is going to do the same.

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<I>This post written by <b>Jeffrey Frankel</b>.</I>