The Applicability of ‘Orthodox Monetary Remedies’ to Developed and Under-Developed Countries
At the 1958 annual meeting of the International Monetary Fund, a representative of one of the less developed countries delivered a vigorous attack on the Fund’s policies with respect to such countries. In dealing with the under-developed countries, he contended that the Fund was quite wrong in insisting ‘on the prescription of orthodox monetary remedies found highly effective in developed countries. Most advice to the under-developed countries and the pressure exerted upon them,’ he declared, ‘is commonly rationalized in terms of an economic theory obtaining in a fully industrialized economy, unrealistic so far as under-developed countries are concerned.’2
KeywordsMonetary Policy Real Output Inflationary Pressure Socialist Country Federal Reserve System
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- 1.No one should need to be reminded that the quotation is from J. M. Keynes, Economic Journal (1946), p. 186. But, to judge from the unconscionable amount of rubbish that has been written by ‘modernist’ economists since 1946 about such matter as ‘dollar shortage’ and convertibility, it is certainly in order to be reminded that Keynes’ topic — ‘The Balance of Payments of the United States’ — dealt precisely with this range of problems.Google Scholar
- 1.Professor R. F. Kahn, Financial Times, September 10th, 1954.Google Scholar