The International Monetary Fund has said its chief economist Olivier Blanchard is retiring from the IMF, and the search for his replacement would begin immediately.

Mr Blanchard, who helped steer the fund since 2008 and guided it through the global economic recession, was behind many of the IMF’s policy shifts in recent years in response to lessons from the crisis.

For example, in 2012 the IMF conceded that the austerity programmes it had pushed caused more economic damage than forecast during the height of the crisis.

IMF managing director Christine Lagarde said Mr Blanchard enhanced the Fund's reputation in economic thought by leading its research department and flagship publication, the World Economic Outlook.

“As one of the world’s leading macroeconomists, Olivier has been on the forefront of the fund’s response to the global financial crisis, spurring a fundamental rethinking of macroeconomic policy that is still reverberating in academic and policy circles,” Ms Lagarde said in a statement.

“Like everyone else at the fund, I will miss him.”

Mr Blanchard will take up a new position as a senior fellow at the Peterson Institute for International Economics, a non-profit think tank in Washington, the IMF said.

A citizen of France like Ms Lagarde, Mr Blanchard taught at Harvard University and the Massachusetts Institute of Technology. His work has focused on monetary policy, speculative bubbles, and labour policy, among other issues, the IMF said.

Mr Blanchard told the Wall Street Journal he needs to digest the issues he’s grappled with during his time at the fund.

Reuters