 The Two Monetary Approaches to the Balance of Payments: Keynesian and JohnsonianJ. Polak No 2001/100, IMF Working Papers from International Monetary Fund Abstract: This paper emphasizes the distinction between two ‘monetary approaches to the balance of payments’, one developed in the IMF, the other under the leadership of Harry Johnson in Chicago. The IMF approach is presented as an evolutionary development of the Kahn/Keynes multiplier model in an open economy. Johnson’s approach is anti-Keynesian and self-proclaimed revolutionary. It posits the ‘essentially monetary character’ of the balance of payments. The IMF model tests satisfactorily as an explanation of income and imports over time. The long-run equilibrium approach of the Chicago model precludes statistical testing, and its short-run tests prove statistically meaningless. Keywords: WP; balance of payments; money supply; interest rate; Monetary approach to the balance of payments; monetarism; IMF; money income; balance-of-payments effect; balance of payments position; propagation period; extent credit creation; money identity; balance of payments equation; Personal income; Credit; Monetary base; Demand for money; Imports (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2001/100 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC. |
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