Gita Gopinath has joined International Monetary Fund as its chief economist, becoming the first woman to occupy the top IMF post. Gopinath joined last week at a time, when she believes the world is experiencing a withdraw from globalization, posing challenges to multilateral institutions.
The John Zwaanstra professor of International Studies and Economics at Harvard University, Gopinath, 47, succeeds Maurice (Maury) Obstfeld as Economic Counsellor and Director of the IMF's Research Department. Obstfeld retired December 31. Announcing her appointment on October 1, IMF Managing Director Christine Lagarde described her as one of the world's exceptional economists with above reproach academic qualifications, a proven track record of philosopher leadership and widespread international experience.
The 11th chief economist of the IMF, Gopinath in a fresh meeting to The Harvard Gazette describes her engagement at the IMF as a marvelous honor and said the meeting of the first ever lady for this location speaks highly of IMF's Managing Director Lagarde. She is extraordinary, not just in her management of the IMF but as a role model for women around the world, she said.
Identifying some of her top priority at the IMF, Gopinath told The Harvard Gazette that she would like the IMF to maintain to be a place that provides academic management on the significant policy question. Among the investigate issue that I would like to push, one would be sympathetic the role of leading currencies like the dollar in worldwide trade and economics. We could do more on the empirical side to try to appreciate countries' dollar exposures and on the hypothetical side in terms of the implication for worldwide spillovers, consequences of dollar shortage, etc, she said.
Most countries invoice their trade in dollars and borrow worldwide in dollars. This is a central part of the international price system and the international monetary system and it will be exciting to explore its penalty in greater depth with the IMF, she said. Gopinath considers the apparent move away from globalization as one of the top challenges being faced by the IMF.
The one (biggest issues being faced by the IMF) that is totally clear and present is that we are seeing the first serious retreat from globalization. This has not happened in the past 50 or 60 years when the world moved toward lower tariffs and mounting trade across countries.
Over the past several months, we have the US-imposed tariffs and reprisal to them from China and other nations. There is in general growing indecision about trade policy, including the one arising out of Brexit.
"While the trade has reduced global poverty and raised livelihoods, its penalty for inequality, and on whether the rules of engagement are fair, are real concerns that need to be addressed, she said.
Gopinath said there is also a concern about whether there is the right multilateral institutions and frameworks in place to make sure everybody feels that there is fairness in trade. And the same goes for capital flows, she added.
Foreign direct investment was always viewed very favorably by countries. But because most of the FDI is now in tech-heavy firms, there are growing concerns about national security and international property theft. So I believe this retreat from globalization and this retreat from multilateralism is quite unique to the times we are living in, Gopinath said.
Another important concern, she said, is the health of promising markets as the US continues to normalize its interest rates. The capital flows to several markets have upturned, putting pressure on their exchange rates and accordingly on inflation, and on balance sheets, given that several emerging markets borrow heavily in dollars, said the IMF chief economist.
