, 4 tweets, 1 min read Read on Twitter
If China ever followed the IMF's fiscal advice (the IMF wants, a gulp, 7.5 pp of GDP fiscal consolidation over time), China's current account would not remain close to balance ...

(apologies for redoing this tweet -- the initial tweet left out the critical "not")
China poses a particular problem for the Fund:

the Fund basically thinks the policies (notably a large augmented fiscal deficit and loose credit) that brought its current account surplus down to "fair value" are themselves unsustainable ...
But there is a broader point: the Fund's fiscal advise has an adding up problem. Each country team tends to want fiscal consolidation in their country to reduce its risks. But the result is a large recommended global consolidation in a zero rate world

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