Abstract: During the years of the Bretton Woods system, two of the most – if not the most -- influential articles on exchange-rate systems were written by Milton Friedman and Harry Johnson, respectively. Friedman’s article, “The Case for Flexible Exchange Rates,” was published in 1953. Johnson’s article, published sixteen years later, carried the almost identical title—“The Case for Flexible Exchange Rates, 1969.” While both articles achieved classic status, in the 1970s and 1980s Johnson’s essay appears to have surpassed Friedman’s essay in stature in the view of some economists. This paper provides a comparison of the arguments in favour of flexible rates and against fixed rates presented in the respective articles by Friedman and Johnson. I conclude that Friedman’s essay presaged all of the major arguments made in Johnson’s essay while excluding several major misses made by Johnson. Nevertheless, there were pragmatic reasons why Johnson’s essay became more influential.
Read the paper: The Case for Flexible Exchange Rates in 1953 and 1969: Friedman versus Johnson
