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International Monetary Fund. Research Dept.
This paper deals with the role of inflationary expectations from a theoretical and empirical point of view. Assume that an economy is growing at a steady pace and that the price level is not expected to change. For many individuals, the direct substitution of consumption goods for money becomes far more attractive than the substitution of financial assets for money. The coefficients for the lagged dependent variable are somewhat higher when the equations contain the interest rate than when they do not. The influences on the demand for money in the United States have not been very different from those in other countries, including the developing countries. This conclusion vitiates the rule of thumb, attributed to Modigliani and supported by Dornbusch and Fischer in their macroeconomic textbook, on how to decide whether the nominal interest rate or the expected rate of inflation should be included as determining the demand for money.
International Monetary Fund. Research Dept.
This paper explores wage-price link in a prolonged inflation. A fixed tie between wages and prices must have significant effects in any economy. A wage-price link of the type discussed in this paper assumes that wages will be adjusted for any rise in consumer prices, subject to certain safeguards. This will protect wage earners against any significant fall in real wages arising from investment inflation. For a free economy, in which economic adjustments are induced by changes in prices and wages, the imposition of the degree of rigidity implied by this association is of far-reaching importance. in several countries, the use of wage-price links is a consequence of the fear of labor that real wages will be adversely affected by inflation. Although the basic causes of inflation vary widely in different countries and at different times, the process of inflation always shows similar characteristics. In an economy which is functioning properly, the distribution and use of the gross national product should result in an aggregate demand for goods and services that tend to equal the available supply of goods and services at approximately stable prices.
International Monetary Fund. Research Dept.
Selections from this paper were delivered at the Annual Meeting of the American Statistical Association, Philadelphia, Pennsylvania, on September 8, 1965.
International Monetary Fund. Research Dept.
This paper considers whether the objective of controlling aggregate reserves is still appropriate under current international monetary arrangements and discusses some of the means that have been proposed to achieve such control. Both the demand for and the supply of world reserves have changed as a result of the shift to flexible exchange rates and the growth of private capital markets as means of financing payments disequilibria. Mechanisms designed to achieve greater control over reserve growth would have to rely on direct constraints on individual countries. The desirability of imposing such constraints must be assessed in the light of how effective liquidity control can be in achieving the objective of more timely and effective adjustment. In this connection, the surveillance of exchange rate policies provided for in the IMF's Proposed Second Amendment to the Articles of Agreement may be a more effective weapon than direct control of liquidity.
International Monetary Fund. Research Dept.
This paper examines the conditions under which the monetary authorities of a large industrial country can influence the exchange rate while keeping the growth rate of the money stock on a predetermined target. Monetary policy in the large industrial countries has in recent years focused primarily on the achievement of predetermined growth rates for monetary aggregates. This study treats such intervention as an example of a broader class of combination policies that, for convenience, may be called “sterilized policies.” In order to determine whether sterilized policies may be expected to be effective, this study examines the role of several specific types of monetary policy instrument in the context of a portfolio-balance model of financial markets. Each of the major countries employs a unique combination of policy instruments, ranging from market-oriented systems largely free of regulation to systems that rely heavily on quantitative ceilings and regulated interest rates. It is shown that sterilized changes in at least three of these instruments, as well as exchange market intervention, will have predictable effects on the exchange rate. The potentially effective instruments are reserve requirements on nonresident deposits or on deposits that are included in the targeted monetary aggregate, and controls on interest rates that are payable on such deposits.
International Monetary Fund. Research Dept.
MARTIN L. LOFTUS

Selections from this paper were delivered at the Annual Meeting of the American Statistical Association, Philadelphia, Pennsylvania, on September 8, 1965.

International Monetary Fund. Research Dept.
This paper discusses the causes of the imbalance of international payments. Under the forces of supply and demand, gold came to have a certain value in relation to goods, which enabled it to function smoothly as a medium of reserve and settlement. This value varied somewhat from time to time under the influence of new discoveries or the exhaustion of existing sources. Of all the particular imbalances in the international payments pattern, that between the dollar and other currencies is the greatest. Unfortunately, it is extremely difficult to measure the amount of imbalance existing. Europe has made considerable and, to some extent, successful efforts to expand direct sales to the United States. It is in the sphere of finished manufactures principally that one could hope for an expansion of exports by an organized export drive or currency devaluation, other categories of goods depending more on the level of US production and national income.
MARTIN L. LOFTUS

THE SELECTED REFERENCES presented in this bibliography cover books, pamphlets, reports, and periodical articles which describe the functions, organization, and activities of the International Monetary Fund. Publications on the various aspects of international economics are included only when they contain material relating specifically to the Fund. This is a continuation of the bibliographies published in Staff Papers, Vol. I, No. 3 (April 1951), Vol. Ill, No 1 (April 1953), and Vol. IV, No. 3 (August 1955). A few publications issued before 1955, which were not included in the previous bibliographies, are also listed here. Although most of the Fund’s official publications are included, this is not intended to be a complete bibliography of such publications.