The International Monetary Fund is ahead of the game when it comes to learning lessons from the economic crisis. In a paper, which will be published today and has been seen by the Financial Times, Olivier Blanchard, the IMF’s chief economist, is refreshingly honest about the lessons from the crisis and logical in the ideas for reform floated.

This is the IMF working as it should. Even if some of its ideas do not fit the current orthodoxy.

The suggestion which leaps out of the page as most controversial is that inflation targets should be raised, implying that in normal times inflation would be closer to 4 per cent and interest rates would be higher than over the past few decades. That would give monetary policy more scope to be loosened in a future crisis, leaving less for fiscal policy to do. Read more