Money in the International Economy. A study in balance of payments adjustment

[Library Metadata and Title Page]: Library circulation records, publication details, and the full title page for Haberler's study on international monetary adjustment. [Preface to the American Edition]: Haberler discusses contemporary developments in 1965, specifically critiquing Jacques Rueff's proposal to return to the gold standard and De Gaulle's gold policy. He argues against doubling the price of gold, suggesting it would be a breach of confidence and inflationary. Instead, he advocates for a more relaxed U.S. policy, potentially including a refusal to buy gold or letting the dollar float to counter foreign pressures, while maintaining internal price stability. [I. The Purpose of the International Monetary Mechanism]: Haberler defines the role of money as a tool for efficiency, citing J.S. Mill, and warns that it only exerts independent influence when it 'gets out of order' through inflation or deflation. He highlights the success of the 1948 German currency reform as an example of restoring the price mechanism and argues that international money's primary function is to facilitate the global division of labor, which is threatened when fixed exchange rates become ends in themselves. [II. The International Balance of Payments]: This section explains the accounting and economic definitions of the balance of payments, distinguishing between 'autonomous' transactions (market-driven) and 'accommodating' transactions (used to bridge gaps). Haberler provides 1963 data for the U.S. and U.K. to illustrate how deficits are measured and discusses the complexities introduced by the gold exchange standard and government interventions. [III. Causes of Disequilibrium]: Haberler categorizes the causes of balance-of-payments disequilibrium into monetary (inflation/deflation) and non-monetary (shifts in demand/growth rates) factors. He critiques the 'structuralist' school in Latin America, arguing that financial discipline is the necessary cure regardless of the cause. He also explores the relationship between differential growth rates and deficits, noting that a country's balance depends on how growth is financed and its impact on relative wage costs. [IV. Balance of Payments Policy]: Haberler analyzes different methods of balance-of-payments adjustment, contrasting market-type methods (fixed or flexible rates) with non-market controls. He argues that downward wage rigidity gives the fixed-rate system an inflationary bias, as adjustment often requires inflation in surplus countries. He critiques the 'adjustable peg' system for encouraging speculation and advocates for flexible rates or a 'widened band' (gold points) to allow for smoother adjustments without sacrificing free trade or employment. [V. International Liquidity]: Haberler examines the debate over international liquidity, critiquing Robert Triffin's warnings of a coming 'liquidity squeeze.' He defines a true scarcity of liquidity as a situation where countries are forced into deflation or trade restrictions solely to acquire reserves. He argues that current liquidity is sufficient and that the real danger is 'excessive liberalism' in shoring up weak currencies (like the 1964-5 sterling run) without requiring necessary internal adjustments. [VI. Summary and Conclusions]: The author concludes that fears of a liquidity scarcity are exaggerated and that the post-war IMF system has functioned well. He emphasizes that the primary need is improving the adjustment mechanism rather than creating more automatic liquidity. He warns against 'democratizing' the IMF in a way that would make it ineffective and argues that the trade of less-developed countries, though smaller, is vital to their welfare. [Author Biography]: A brief biographical sketch of Gottfried Haberler, detailing his academic career at the University of Vienna and Harvard, and his major publications.