Arie Arnon

Thomas Tooke : pioneer of monetary theory

This is the first full length study of Thomas Tooke, a leading monetary economist of the 19th century, a pioneer of quantitative monetary history and the greatest opponent of the quantity theory of money in the history of economic thought.

Sovereignty and Economic Development: The Case of Israel and Palestine

The future permanent economic agreement between Israel and Palestine will have to determine, among other things, the trade regime and whether there should be economic borders. The decision will have to satisfy goals of economic development, including a reduction in economic and social gaps between the two countries, and questions of sovereignty. We describe and analyse the evolution of the Palestinian economy before and since the Oslo agreements. Concerning the future agreement, we discuss the tradeoffs between sovereignty and prosperity and argue for the establishment, at first, of economic borders and a regime of less than full integration.

LINDER'S HYPOTHESIS REVISITED : INCOME SIMILARITY EFFECTS FOR LOW INCOME COUNTRIES

In this paper we test whether a Linder effect exists in international trade generally, and in trade among, and between, developed and less developed countries in particular. We provide empirical evidence that, contrary to accepted views, the Linder effect can be found for both developed and less developed countries.

Monetary integration between the Israeli, Jordanian and Palestinian economies

Monetary Integration between the Israeli, Jordanian and Palestinian Economies. —The peace process between Israel and the Palestinians raises some interesting economic questions concerning integration between the West Bank, Gaza and Israel. Past and current arrangements between Israel, the occupied territories and Jordan are described, especially the flows of goods and labour. The authors’ findings indicate that Israel, the West Bank and Gaza were closely integrated, whereas economic integration between the occupied territories and Jordan was much weaker. Based on these circumstances of the past, the (imposed) monetary union between Israel and the Palestinian economy was warranted. However, optimal monetary arrangements in the future will depend on the extent of changes in real flows and on a satisfactory settlement of the seigniorage issue.ZusammenfassungMonetäre Integration zwischen israelischer, jordani-scher und palästinensischer Wirtschaft. —Aus dem Friedensprozeß zwischen Israel und den Palästinensern ergeben sich einige interessante ökonomische Fragen zur Integra-tion zwischen der Westbank, dem Gazastreifen und Israel. Die Verfasser beschreiben die früheren und gegenwärtigen Regelungen zwischen Israel, den besetzten Gebieten und Jordanien, insbesondere die Güterströme und die Arbeitskräftewanderungen. Ihre Er-gebnisse zeigen, daß Israel, die Westbank und Gaza eng integriert waren, während die wirtschaftliche Integration zwischen den besetzten Gebieten und Jordanien viel schwä-cher war. Auf der Basis dieser früheren Bedingungen war die Währungsunion zwischen Israel und der palästinensischen Wirtschaft gerechtfertigt. In der Zukunft werden opti-male Währungsvereinbarungen jedoch von dem Ausmaß der Veränderungen in den realen Strömen und von einer befriedigenden Lösung hinsichtlich der Münzerlöse abhängen.

Israeli Policy Towards The Occupied Palestinian Territories: The Economic Dimension 1967-2007

This article focuses on the economic dimension of Israeli policy towards the Palestinian territories occupied in 1967. The paper argues that since 1967, both before and after the Oslo process, Israeli policy was directed at preventing the ‘Two’, i.e. the division of the land into two states and two economic (and political) sovereign entities while also negating the ‘One’, i.e. the establishment of a single political and economic entity. Although Israeli policy repudiated both the ‘Two’ and the ‘One’, it changed character and formulations from time to time. Thus, Israeli policies will be examined with all their twists, turns and reversals, discussing their repercussions on Israel and especially on the Palestinian economy.

The Open Economy Macromodel: Past, Present and Future

Preface. Introduction. 1. Notes on the development of the international macroeconomic model R. Mundell. Part I: Past Models, Men and Institutions. 2. The two monetary approaches to the balance of payments: Keynesian and Johnsonian J.J. Polak. Discussant Y. Plessner. 3. Long-term fluctuations of real exchange rates with emphasis on those caused by inflation P. Bernholz. Discussant. 4. Why white, not keynes? Inventing the post-war international monetary system J.M. Boughton. Discussant D.E. Moggridge. 5. Struggling with the impossible: sterling, the balance of payments and British economic policy, 1949-72 R. Middleton. Discussant D. Laidler. 6. the Adam Klug memorial lecture: Haberler versus Nurkse: the case for floating exchange rates as an alternative to Bretton woods/ M.D. Bordo, H. James. Discussant P.B. Kenen. Part II: Present The State of the Models. 7. Optimum currency areas and key currencies R. McKinnon. Discussant P.B. Kenen. 8. Designing EU-US Atlantic monetary relations: the impact of exchange rate variability on labor markets on both sides of the Atlantic A. Belke, et al. Discussant J. Aizenman. 9. The open economy macromodel: interactions between theoretical developments and real-world behavior M.v.N. Whitman. Discussant M.J. Flanders. Part III: Future Alternate Models and Institutional Structures. 10. Asset prices, the real exchange rate, and unemployment in a small open economy: a medium-run structuralist perspective H.T. Hoon, E.S. Phelps. Discussant E. Brezis. 11. Do we need a reform of the international monetary institutions after the Asian crises? Some preliminary suggestions using constitutional economics F. Schneidler. Discussant B. Bental. 12. The architecture and future of the international monetary system D. Salvatore. Discussant M.v.N. Whitman. Index.

Keynes, Wicksell and Active Monetary Policy

The acceptance of monetary policy into mainstream economic thinking was a difficult and slow process. Henry Thornton had already advocated monetary policy in 1802 in his monumental Paper Credit. However, it was not until the publication of Walter Bagehot’s Lombard Street in 1873 that a theory of monetary policy was reintroduced into mainstream thinking, and even then it was in a restricted, defensive form. The profession had to wait another 25 years for a full-fledged theory justifying active monetary policy of the kind that Thornton provided, this time in Knut Wicksell’s Interest and Prices (1898).