Olivier Blanchard

Olivier Jean Blanchard (born December 27, 1948) is a French economist and professor. He is serving as the Robert M. Solow Professor Emeritus of Economics at the Massachusetts Institute of Technology and as the C. Fred Bergsten Senior Fellow at the Peterson Institute for International Economics.

Blanchard was the chief economist at the International Monetary Fund from 1 September 2008 to 8 September 2015. Blanchard was appointed to the position under the tenure of Dominique Strauss-Kahn; he was succeeded by Maurice Obstfeld. According to IDEAS/RePEc, he is one of the most cited economists in the world. Blanchard has also authored an undergraduate macroeconomics textbook, appearing so far in eight editions, which is one of the most widely used economics books at the undergraduate level, and in 1989 a graduate-level textbook (together with Stanley Fischer), which was prominent in its time.

Career
Blanchard graduated from ESCP in 1970. From 1970 to 1973, he completed graduate level courses in economics and applied mathematics at Paris Dauphine University and Paris Nanterre University. He obtained a PhD in economics from MIT in 1977 and then taught at Harvard University between 1977 and 1983, after which time he returned to MIT as a professor. His areas of expertise in macroeconomics are the functions of monetary policy, the role of speculative bubbles, the determinants of unemployment and the role of the labor market as a whole, the effects on countries who have transitioned away from communism, and the factors that have sparked the most recent global financial crises. Between 1998 and 2003 Blanchard served as the chairman of the economics department at MIT.

Blanchard has published numerous research papers in the field of macroeconomics, as well as undergraduate and graduate macroeconomics textbooks. In 1987, together with Nobuhiro Kiyotaki, Blanchard demonstrated the importance of monopolistic competition for the aggregate demand multiplier. Most New Keynesian macroeconomic models now assume monopolistic competition for the reasons outlined by them. He is a fellow and past Council member of the Econometric Society, and a member of the American Academy of Arts and Sciences.

International Monetary Fund
During his tenure as chief economist, Blanchard's reshaped IMF policies. During the Great Recession Blanchard supported global fiscal stimulus. During its slow recovery he urged a cautious removal of stimulus and advocated quantitative easing.

Austerity v. stimulus debate
By 2010, following the financial crisis, many countries ran significant budget deficits. There was a global turn to austerity as Washington Consensus economists encouraged governments to cut spending and raise taxes to avoid a government debt crisis, as occurred in Greece. In June 2010, Blanchard and Carlo Cottarelli, the director of the IMF's fiscal affairs department, co-authored an IMF blog post entitled "Ten Commandments for Fiscal Adjustment in Advanced Economies."

By 2011 Paul Krugman noted that Blanchard was already "suggesting that harsh austerity programs may be literally self-defeating, hurting the economy so much that they worsen fiscal prospects." Krugman thinks that by 2012, every country that had introduced "significant austerity" had suffered economically, and that Blanchard had issued "what amounted to a mea culpa." According to Krugman, "the IMF now believes that it massively understated the damage that spending cuts inflict on a weak economy." On the other hand, the IMF under Blanchard in 2014 was forced to admit that it had overestimated the negative effects of austerity – the IMF had warned of low growth because the British government did not spend enough, but in the end, the British economy grew much larger than the IMF had predicted. IMF-head Christine Lagarde apologized to the British government for the mistake.

Inequality
Under Blanchard's tenure at IMF, Jonathan D. Ostry and Andy Berg published their findings that "inequality was detrimental to sustained growth." By April 2014, in the World Economic Outlook, Blanchard situated inequality as a "central issue" for "macroeconomic developments."

"as the effects of the financial crisis slowly diminish, another trend may come to dominate the scene, namely rising inequality. Though inequality has always been perceived to be a central issue, until recently it was not seen as having major implications for macroeconomic developments. This belief is increasingly called into question. How inequality affects both the macroeconomy, and the design of macroeconomic policy, will likely be increasingly important items on our agenda for a long time to come."

Textbooks
Blanchard has authored two textbooks in macroeconomics: A seminal advanced textbook for graduate students "Lectures on Macroeconomics" in 1989 together with Stanley Fischer, which has been called a gold standard for its era by the American Economic Association, and the intermediate-level undergraduate textbook simply called "Macroeconomics". The first edition of "Macroeconomics" appeared in 1996, and in 2021 its eighth edition appeared, published by Pearson Education. In a survey of 65 leading economics departments in 2021, Blanchard's textbook was the most widely used undergraduate macroeconomics textbook of all, not least because of its popularity in European universities, followed by Greg Mankiw's in second place.

Political views
In the 2007 French presidential election, Blanchard supported Union for a Popular Movement presidential candidate Nicolas Sarkozy. Ahead of the 2024 French legislative election, he criticised the far-right National Rally's platform but called that of the left-wing New Popular Front worse, saying that it would lead to "an economic catastrophe".