Gottfried Haberler, ed., The International Monetary System in the World Recession (1984)

Haberler’s 1984 book is best read as a short edited symposium on the early-1980s downturn, not as a single essay. Haberler acts as editor, framer, and contributor: his opening assessment gives the collection its anti-catastrophic baseline, while chapters by Michael Bruno, Robert A. Mundell, and other participants bring out rival emphases—oil and real-wage adjustment, international policy conflict, debt strain, and the future of floating exchange rates.

The world economy seems to be just emerging from the severest and longest recession of the postwar period.

The first cluster of chapters asks what made the recession so deep. Haberler’s contribution rejects a Great Depression analogy and stresses disinflation after the inflationary 1970s: restrictive monetary policy produced unemployment because wages, contracts, and expectations adjusted slowly. This framing shapes his skepticism toward generalized reflation. The volume nonetheless preserves disagreement. A more alarmed reformist voice presents the world economy as trapped not only by weak demand but by professional and policy disarray:

The world economy is sinking, yet the profession is unable to reach any consensus on what should be done.

Bruno’s contribution gives the volume its strongest structural account. He treats the oil shocks as real income losses requiring changes in relative wages, profits, and spending, and he emphasizes why labor-market and distributional adjustment could be slow. Haberler’s editorial framing resists making oil the whole explanation, but Bruno’s chapter broadens the discussion beyond a simple monetary contraction story. The volume therefore juxtaposes monetary disinflation with supply shock, wage resistance, and income redistribution, while using cross-country OECD evidence to keep the scale of the oil burden in perspective.

For all Organization for Economic Cooperation and Development (OECD) countries as a group it was less than one year’s normal growth.

A second set of chapters and discussions turns from causes of recession to the international monetary setting in which recovery had to occur. Mundell’s monetary-reform concerns and Haberler’s defense of floating exchange rates mark the main tension: was the post-Bretton Woods order a cause of instability, a shock absorber, or an unavoidable second-best arrangement? Haberler’s answer is cautious. Fixed or semi-fixed rates require monetary convergence and domestic flexibility that major countries no longer possessed; reformist contributors press more urgently for coordination or rules that might reduce exchange-rate and interest-rate conflict.

The comparison with the 1930s recurs across the volume as both warning and restraint. Haberler and sympathetic contributors argue that the institutional setting of the 1980s differed decisively from that of the Depression: deposit insurance, central-bank activism, and modern lender-of-last-resort expectations made a cumulative monetary collapse far less likely.

It is unthinkable today that the monetary authorities would stand idly by and let the money supply contract by 30 percent as the Federal Reserve did in the 1930s.

Taken as a whole, the volume stages a debate about adjustment under disinflation. Haberler supplies the disciplined monetarist thesis: recession is the painful transition out of inflation, and floating rates are imperfect but durable in a world of divergent policies. Bruno complicates that account by making real shocks and distributional bargaining central. Mundell and the other monetary-reform contributors push against complacency by stressing the absence of consensus, the dangers of an unstable dollar, and the limits of unilateral policy. Its value lies in this multi-voiced structure: it captures the early-1980s moment when recovery was beginning, but economists still disagreed over whether the crisis demanded patience, structural adjustment, or international monetary reform.