Haberler Versus Nurkse : The Case for Floating Exchange Rates as an Alternative to Bretton Woods?

This paper examines the alternative views of fixed versus floating exchange rates presented in Gottfried Haberler's Prosperity and Depression (1937) and Ragnar Nurkse's Interwar Currency Experience (1944). It shows how Haberler presented a model of exchange rates that is an anticipation of the Mundell-Fleming approach, and demonstrated how floating rates could offer a protection against the transmission of monetary shocks. But Haberler refrained from an open advocacy of a floating rate system, and indeed continued to work with the League of Nations and with Nurkse during the War, when the League published Nurkse's study of the interwar experience, which argued that a managed fixed rate system would reduce the likelihood of speculative attacks and hot money flows