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

Goodhart, Charles A. E. and Needham, Duncan J. (2018) Historical reasons for the focus on broad monetary aggregates in post-World War II Britain and the ‘Seven Years War’ with the IMF. Financial History Review, 24 (03). pp. 331-356. ISSN 0968-5650

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Abstract

The 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.

Item Type:	Article
Official URL:	https://www.cambridge.org/core/journals/financial-...
Additional Information:	© 2018 Cambridge University Press
Divisions:	Financial Markets Group
Subjects:	H Social Sciences > HC Economic History and Conditions
Date Deposited:	28 Mar 2018 09:18
Last Modified:	11 Dec 2024 21:35
URI:	http://eprints.lse.ac.uk/id/eprint/87364

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