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Historical reasons for the focus on broad monetary aggregates in post-World War II Britain and the 'Seven Years War' with the IMF

Accepted version
Peer-reviewed

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Type

Article

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Authors

Goodhart, CAE 
Needham, DJ 

Abstract

jats:pThe British monetary authorities have traditionally focused on broader monetary aggregates than their counterparts elsewhere. The reasons include: the willingness of UK banks to allow customers to make payments by drawing on time deposits, the particularities of the UK approach to managing the national debt and the foreign exchange reserves, and the flow-of-funds system of national accounts developed after World War II. This article outlines these reasons, and explores the implications for the UK's often fractious relationship with the International Monetary Fund during the 1950s and 1960s. It explains why IMF conditionality on loans to the UK focused on broad aggregates.</jats:p>

Description

Keywords

monetary policy, monetary history, International Monetary Fund

Journal Title

Financial History Review

Conference Name

Journal ISSN

0968-5650
1474-0052

Volume Title

24

Publisher

Cambridge University Press (CUP)