Haberler Versus Nurkse: The Case for Floating Exchange Rates as an Alternative to Bretton Woods?

U of St. Gallen, Dept. of Econ. Working Paper No. 2001-08

33 Pages Posted: 5 Oct 2001

See all articles by Michael D. Bordo

Michael D. Bordo

Rutgers University, New Brunswick - Department of Economics; National Bureau of Economic Research (NBER)

Harold James

Princeton University - Department of History; National Bureau of Economic Research (NBER)

Date Written: June 2001

Abstract

This paper examines the alternative views of fixed versus floating exchange rates presented in Gottfried Haberler's Prosperity and Depression (1937) and Ragnar Nurkse's Interwar Currency Experience (1944). It shows how Haberler presented a model of exchange rates that is an anticipation of the Mundell-Fleming approach, and demonstrated how floating rates could offer a protection against the transmission of monetary shocks. But Haberler refrained from an open advocacy of a floating rate system, and indeed continued to work with the League of Nations and with Nurkse during the War, when the League published Nurkse's study of the interwar experience, which argued that a managed fixed rate system would reduce the likelihood of speculative attacks and hot money flows.

Keywords: Exchange rates, floating rates, interwar period

JEL Classification: N1, N2, N4

Suggested Citation

Bordo, Michael D. and James, Harold, Haberler Versus Nurkse: The Case for Floating Exchange Rates as an Alternative to Bretton Woods? (June 2001). U of St. Gallen, Dept. of Econ. Working Paper No. 2001-08. Available at SSRN: https://ssrn.com/abstract=286132 or http://dx.doi.org/10.2139/ssrn.286132

Michael D. Bordo

Rutgers University, New Brunswick - Department of Economics ( email )

New Brunswick, NJ
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Harold James (Contact Author)

Princeton University - Department of History ( email )

Princeton, NJ 08544
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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