Business Case Studies & Business Publications

The IMF's Coordinated Growth Strategy of...

Debaere, Peter

Case

The IMF's Coordinated Growth Strategy of 1977/1978

Debaere, Peter

G-0601 | Published October 17, 2007 | 15 pages Case

Collection: Darden School of Business

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Learning Objectives

The case documents the growth strategy that the IMF wanted to orchestrate after the first oil crisis and as the world economy did not return to the growth rates of the 1960s. The case illustrates the pinnacle of Keynesian thinking that prevailed at the time: a view of the international economy as an almost hydraulic system that could be manipulated by government policies at will to reach desirable aggregate targets. The failure of the strategy, among other things, emphasizes the importance of inflationary expectations. The case is also a nice opportunity to discuss the Phillips curve as well as the current global imbalances and what can be done about them.