“The IMF has recognised and publically admitted there is a need for restricting capital flows from country to country under certain conditions,” says Selwyn Pellett of the Productive Economy Council.

The IMF’s executive board said that capital controls are “squarely within the toolkit”. Most of its directors “broadly supported the substance of the proposed policy framework” – suggesting there is greater consensus than before between developed and developing countries on the use of controls.

“This is what we at the PEC have been saying and advocating for some time and it’s reassuring this thinking is finally becoming mainstream. For those who have advocated the free flow of capital under any conditions this announcement will be a jolt to their belief system,” says Pellett. “Economists around the world will have to rethink their training as clearly one model does not fit all circumstances.” read more »