The archive.

A currency can look stable while rationing and trade controls conceal the pressures that would undo its exchange rate. In this 1945 article, Gottfried Haberler asks how governments should set postwar rates when recorded prices offer unreliable evidence and devastated economies face urgent import needs. He treats purchasing-power parity as a useful but crude guide, judging rates instead against the domestic price policies and removal of controls that countries can realistically sustain. His case for initially low valuations in continental Europe is conditional: undervaluation may ease liberalization and avoid confidence-damaging depreciations, but it also raises prices and can worsen the terms of trade. The article makes concrete why choosing a rate means choosing which risks of reconstruction to bear.

Expert agreement on postwar economic cooperation did not guarantee that governments would make it possible. This gap shapes Gottfried Haberler’s 1946 review of the conference addresses collected by Arnold J. Zurcher and Richmond Page. Appreciative of the volume’s quality, Haberler tests its proposals against political constraints and uneven economic adjustment. Should aid be withheld if outright gifts cannot win approval? Can aggregate spending resolve unemployment in depressed regions? His sharpest qualifications concern cartel restrictions sustained by tariffs and optimistic accounts of Britain’s economic prospects. This compact review offers a concrete example of Haberler’s critical method: distinguish desirable principles from feasible policies, and welcome challenges to prevailing opinion without accepting assertions in place of supporting argument.

The gap between theoretical competence and usable economic analysis shapes Gottfried Haberler’s brief review of Hans Böhi’s study of postwar equilibrium exchange rates, prepared for the Swiss government. Haberler credits Böhi’s command of international trade theory and his recognition that price-and-cost comparisons cannot provide an unrestricted purchasing-power-parity rule. Yet he questions an exposition that treats quantitative relationships entirely in words, omits references, and gives familiar terms such as elasticity unusual meanings. Written without knowledge of the Keynes and White plans, the study also stands apart from the monetary debates its subject demands. The review offers a compact example of Haberler’s critical standards: sound theory must also make its reasoning accessible and establish its policy bearings.

An equation can be true at every instant yet fail to explain how income changes. This distinction anchors J. J. Polak and Gottfried Haberler’s brief joint restatement, written to reconcile their preceding contributions on the foreign-trade multiplier. They favour an exports-based multiplier for tracing income adjustment under specified conditions, while warning that an export-surplus formula’s validity as an identity does not establish its causal usefulness. Their treatment of consumption makes the difficulty concrete: a stable relationship between current consumption and previous income need not imply a stable ratio of current consumption to current income. The statement offers a compact lesson in what multiplier reasoning requires—explicit timing, defensible assumptions about constant parameters, and restraint where the available relationships cannot support a general prediction.

Can an expansion of exports generate successive rounds of income when imports rise alongside it? In this 1947 comment, Gottfried Haberler challenges Polak’s foreign-trade multiplier analysis by separating accounting identities from causal sequences. A formula that balances income and expenditure does not, he argues, explain how spending unfolds over time. His distinctive concern is with the assumptions behind the calculation: which expenditure is autonomous, how imports respond to income, and whether the relevant behavioral relationships are stable. Haberler allows that balanced trade can bring idle resources into production, but insists that gains from trade need not be multiplier effects. The reader gains a precise way to distinguish an increase in output from a process of expenditure multiplication—and to see why apparently rival formulas may describe different economic situations.

Anything may happen, but what happens cannot be deduced from the income equation.

Ten years after The General Theory appeared — and in the year of Keynes's death — Haberler set out to weigh the book as a scientific system rather than an object of discipleship, a verdict he revisits sixteen years on without softening it. He grants Keynes the systematic use of income effects, the multiplier, and a transformed vocabulary of macroeconomic model-building, but denies any overturning of monetary and cycle theory's logical foundations. The demonstration of a static competitive underemployment equilibrium, he argues, rests entirely on money-wage rigidity; admit flexible wages and the Keynes and Pigou effects erode it. Say's Law, properly stated, had already been abandoned by serious neoclassical theorists. Praise without idolatry is the essay's discipline.

Hero worship is nowhere less appropriate than in science.

Generating models that oscillate is not the same as explaining actual business cycles. In his contribution to this 1949 collective discussion, Gottfried Haberler asks how researchers can choose among proliferating theories without dismissing what they already know. His criticism cuts both ways: ambitious econometric techniques may promise more than they deliver, but failed research programmes can still leave useful evidence and methods. Against the search for one encompassing explanation, he proposes testing narrower causal claims through historical as well as statistical evidence. Readers can discover a concrete alternative to both theoretical overconfidence and theory-free measurement: inquiry centred on income, employment, and the limited propositions that economists can reasonably share.

However, the more models we have, the less we seem to know of the real business cycle.

Currency depreciation can increase exports and reduce imports yet still worsen the balance of payments. In this 1949 article, Gottfried Haberler explains why physical trade responses do not settle the monetary question: prices, supply elasticities, and the currency in which the balance is measured also matter. His distinctive approach traces foreign-exchange demand and supply back through trade schedules to domestic production and consumption, showing how stable commodity markets can coexist with an unstable currency market. Readers can discover both the limits of familiar elasticity rules and the difference between an adjustment that works in principle and one that requires impractically large exchange-rate movements. Haberler also separates weak trade responses from inflationary expenditure shifts that can undo depreciation’s initial gains.

Rebuilding a scholarly discipline after a world war is partly a matter of statutes, dues, and committee votes — and this report captures economics doing exactly that. Writing for the American Economic Association, Haberler argues for joining the newly forming International Economic Association, whose design meets the conditions Princeton had set: a modest structure resting on existing national bodies, financed but not governed by UNESCO, and cheap to support at $200 in annual dues. He recounts the April 1949 Paris meeting, the draft statutes reviewed paragraph by paragraph, and the interim slate of officers awaiting the Council's confirmation. Behind the procedural surface lies a real transition: economics reconstituting itself as an organized international profession through deliberately limited cooperation.

In accordance with the Interim Arrangements provided in the Draft Statutes, the Interim Committee nominated Professor Schumpeter as President, M. Rueff as Vice President, and Ronald Walker (Australia) as Treasurer of the I.E.A.

Haberler builds the theory of comparative cost from a two-country, two-commodity opportunity-cost model, then presses on the imperfections that critics invoke to justify protection. A mere catalogue of deviations from the competitive ideal, he insists, proves only possibility, not necessity: factor immobility alone leaves trade welfare-improving so long as factor prices stay flexible, and it is rigid wages—especially those maintained by unions—that generate the unemployment which can make trade inferior to autarky. Even then protection is a second-best, largely short-run remedy. He extends the same discipline to external economies, showing how unrecognised ones can make a country appear to hold a comparative advantage in the wrong commodity, and to the infant-industry argument, which he accepts in principle while noting it can equally counsel freer trade.

It can be easily shown, however, that what really causes trouble and may make trade detrimental and justify protection is rigidity of factor prices, which may or may not be associated with immobility of factors.

International trade is governed proximately by money prices and money costs, yet exchange-rate complications and pre-trade cost comparisons make the doctrine of comparative advantage easy to misread. Setting the Marshall-Viner real-cost approach against opportunity cost—which he defends as a workable approximation to general-equilibrium theory—Haberler concedes that increasing returns, monopoly, wage rigidity, and external economies all qualify the free-trade case, then argues that liberal policy remains preferable precisely because interventionist systems obscure the comparative costs on which rational choice depends. The paired concluding remarks turn to the postwar dollar shortage, where he sides with the optimists against structural pessimism, credits the 1949 sterling devaluation and disinflation with vindicating the classical adjustment mechanism, and rejects discriminatory restrictions against dollar goods in favour of non-discrimination and the most-favoured-nation principle.

Non-discrimination like honesty still remains the best policy.

At the heart of Schumpeter's theory of capitalist development lies a startling doctrine: a stationary circular-flow economy would have a zero rate of interest, and the positive rate observed under capitalism springs entirely from innovation financed by newly created bank credit. Haberler weighs this extreme version against a milder one and finds the extreme untenable, since it demands both the absence of time preference and zero marginal productivity of capital, assumptions he doubts once routine investment and ordinary impatience are admitted. Yet he defends Schumpeter's larger dynamic account, ranking its disequilibrium approach above the excessively static equilibrium theory of Mises and Hayek, who deny that credit expansion can permanently enrich the capital stock. The comparative question of whether dynamics raises or lowers interest, he concludes, is a comparatively unimportant detail.

The extreme version of his theory is hardly acceptable.