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_____, 1962b, “International Disequilibrium and the Adjustment Process,” a paper presented at a seminar in the Research Department of the IMF at approximately this time. It was presented at a World Bank Conference in 1965 and was published in the conference volume as Mundell [1967]. With the adaptations for International Economics, the title of this paper was changed to that shown as Mundell [1968b] below. Throughout the discussion above, we cite this paper informally by the name Barter Theory.
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1 Most of these authors except for Persson are careful to use the words “collected in” (or “appear in his collection”). These are valid statements so long as adaptations are taken to be included in such an expression. In contrast, the word “reprint” has an unambiguous meaning. Flanders [1989, 329] says that these papers are “…reproduced…[in International Economics]…with at most minor changes” We disagree with this statement especially as regards the material in Chapters 11 and 14, as we explain fully below.

2 This expression refers to the analysis of monetary and fiscal policies under fixed and flexible exchange rates. The results can be presented in a 2x2 table as is done explicitly in Mundell [1963c, 18], but more generally includes papers that cover all four cases. This includes, at a minimum, Mundell [1961c] and one of [1963b], [1963c], and [1963e], as well as Fleming [1962]. (Mundell [1964a, 424], denoted hereafter by CJEPS64, includes a much more complicated version of the checkerboard square that appears in Mundell [1963c, 18].) After 1963 there is an explosive growth in such articles, as is apparent from the bibliographies of survey works, such as Marston [1985].

3 See the discussion in section VIII below concerning whether MD should be considered to be part of the Mundell-Fleming model.

4 This interpretation is repeated in Mundell [2001, 224].

5 The Long Footnote does contain the definitions of a given monetary policy and expansionary fiscal policy. These important concepts surprisingly are not dealt with in the DM version of CMP, and in that sense the June 6 version represents an advance over it.

6 The appearance of Mundell [1962a] (IMFSP) as the lead citation in subsequent versions of CMP raises a host of questions. Its presence seems to be connected to the claim made in comments (Mundell [1969, 262]) and recollections (Mundell [2001, 223]) that CMP was written in response to criticisms of IMFSP. This claim is made to seem more plausible with a reference to that paper being present in CMP.

The timing of the publication of CMP seems noteworthy. The paper was first presented outside the Fund on June 6, 1963. Five months later, and with some further minor revisions, it was in print.

The haste of amending the Long Footnote so as to include IMFSP seems to be apparent from its form, and from its inclusion of a grammatical error and consequent unclear antecedent.

7 The very fact that Mundell waits until this juncture to point out contradictions between his previous work and that in CMP serves to favor the continuity view of his work. If instead there had been direct comparisons as results were derived in CMP, much of the paper would have been taken up finding the keys to the inconsistencies between the “early Mundell” and the “late Mundell” (Mundell [2001, 215]). This would have emphasized the narrowness and repetitiveness of Mundell’s research efforts, while showing up as well the inconsistencies between the answers that are generated in different outings.

8 A further point of clarification is in order. While Kyklos places nominal income on the horizontal axis of all diagrams, thus permitting the reader the freedom to use either a Keynesian interpretation (in which nominal income varies because real income does) or a classical interpretation (for which the variation in nominal income is due entirely to movements in the price level), in the CMP incarnation of this diagram only the Keynesian interpretation is countenanced.

9 Note that in using this expression in the title and the body of his paper, Swoboda [1972] is using words which do not appear in the original of Kyklos, although this expression is used in the adaptation which is in International Economics. Further, it is the original version of Kyklos which Swoboda [1972, 163] cites in his paper.

10 Interestingly, similar points in CJEPS61 are initially described as being those “indicated by the foreign trade multiplier.”[1961c, 512] Although these points appear to be ones consistent with a fixed exchange rate regime, they are not so identified. But later in the paper there is a comparison between the results which arise at an unspecified fixed exchange rate equilibrium to those which occur under flexible exchange rates.

11 At that point in time the only macro papers in print or forthcoming by Mundell were: MD, Kyklos, and CJEPS61. Since MD argues that the nature of the exchange rate regime is irrelevant for the values of real variables, it seems to be hardly an appropriate foil for Fleming’s [1962] paper, which makes quite the opposite claim. Similarly, since Kyklos deals exclusively with fixed exchange rates, it is not a suitable case for comparison with Fleming’s paper which covers both exchange rate regimes. The timing of CJEPS61 and Fleming’s paper is such that it is natural to wonder whether Mundell’s research had been influenced by reading an earlier draft of Fleming. We have no evidence on this matter, since the earliest versions of each paper which are in our possession are dated November 1961,

12 For example, in Mundell and Swoboda [1969, 263] Mundell comments on a comparison between the consequences of one policy under perfect capital mobility and those of another policy under capital immobility. Surely Occam’s Razor argues that alterations in the economic situation should be made a step at a time. The informative comparison in this case would have been the consequences of the two policies when the degree of capital mobility is parametric at some bounded level.

13 In dating this famous paper as having been written in 1962, we are using the Mundell [2001, 225] description of the seminar at which the paper was first presented, and combining it with the date of Per Jacobsson’s double heart attack (April 28, 1963). It seems highly unlikely that Fleming’s quip about Jacobsson would have been made after he had died. Other dates that might be appropriate for this paper are: 1963, when Mundell claims the first seminar presentation took place; 1965, when the paper was presented at a World Bank conference; or 1967, when the paper was first published, as Mundell [1967]. In Boyer and Young [2005] we have dealt with the adaptations of this paper, including the change in its title, when it is published as Mundell [1968b]. That is, as Chapter 8 in International Economics.

14 This result is now enshrined in the literature as an element of the Policy Trilemma or Incompatible Trinity (Obstfeld et al.[2004]. Rose [2000, 215] claims that “Mundell was the first to exposit the intrinsic incompatibility…” We have been unable to confirm this claim.

15 Polak {1957, 10] concludes about monetary policy that “A temporary expansion of [domestic] credit (terminated, but not reversed, after the end of, say, one year) will, by itself, bring about (1) a temporary increase in money income and the stock of money; (2) a temporary increase in imports and a permanent reduction of [international] reserves equal in size to the [domestic] credit expansion.”

16 This view is encouraged by the conclusion of CMP which states “We have demonstrated that perfect capital mobility implies different concepts of stabilization policy from those to which we have become accustomed in the post-World War II period.” (Mundell [1963e, 484]) With respect to monetary policy, Mundell appears to recant this position in Mundell and Swoboda [1969, 264], a conclusion on which Swoboda [1972] focuses. Since the comments contained in this citation were made at a conference in 1966, Mundell was repudiating a key conclusion in CMP before the editing of International Economics was undertaken in 1967.

17 This error occurs in a number of Mundell’s publications. It appears most recently in the version of Mundell’s {2002, 5] recollections published in the Arnon and Young conference volume.

18 The wording of this (erroneous) definition is surprisingly close to Fleming’s [1962, 370].

19 Mundell claims [2001,224] that Fleming probably chose CJEPS61 as his point of comparison because that paper uses the interest rate as its gauge of monetary policy, so choosing “It makes a starker contrast between our models.” There are two errors in this statement. First, Mundell had used interest rates almost exclusively as his definition of monetary policy up to this point. Second, as pointed out in a footnote above, CJEPS61 was the first of the checkerboard square papers, and therefore it was the natural choice for the comparison.

20 By 1966 Mundell was repudiating his earlier definition of monetary policy, admitting that it causes confusion. “Professor Mundell states that he seemed to have created a lot of trouble by using, in his early papers, a definition of monetary policy that he no longer liked or accepted.” (Mundell and Swoboda [1969, 262)

21 Mundell (1963d) (BNL) uses the interest rate definition of monetary policy, and this publication appeared after CMP was presented.

22 Although Kyklos starts off with a domestic credit definition of monetary policy, its last sections downplay the money supply. They do so by leaving the LL locus out of the diagrams (([1961a, 167, 168]), and by identifying what happens to monetary policy in accordance with what happens to the interest rate.

23 At this point in the Long Footnote in the adapted version in International Economics the same claim [1968a, 257-8] is made about the movement of the money supply and income in the analysis in IMFSP. Since the dynamic setting of that paper is so much more complicated than the comparative statics of CJEPS61, we confine our attention to this paper alone.

24 We have pointed this out in Boyer and Young [2005, 176-77]).

25 A similar obfuscation of this matter is to be found in Mundell and Swoboda [1969, 263], as we have already noted.

26 In a subsequent paper we intend to investigate whether Fleming [1962] could conceivably have provided no inspiration at all to Mundell’s writing of the CMP.

27 In private correspondence between Friedman and Mundell dated May 27, 1967, obtained from the Hoover Institution Library, we find that the publication of Mundell’s collected works had originally been planned to be undertaken by the Brookings Institution, where Mundell was a Visiting Research Professor in International Economics during the academic year 1964-65. The title proposed originally was “Theory of International Trade.” (Friedman Papers, Box 49.7)

28 Two contemporaries whom Mundell cites during this period are Prais and Rhomberg. Perhaps the most interesting of the footnote elisions that occur in the editing of CMP for International Economics concerns Rhomberg [1964]. We deal with this in Boyer and Young [2005, 174]. As a result the only reference of Rhomberg’s work in International Economics is to his unpublished PhD thesis.

29 In the editing of the footnotes for the 1967 adaptations, acknowledgements to Johnson, Metzler, Patinkin, and Samuelson disappear.

30 It seems likely that Mundell’s move to Chicago and his friendship with Johnson generated both these opportunities to have prior work republished.

31 We have obtained copies of correspondence between Caves, Johnson, and Mundell from the Robarts Library at the University of Toronto. In order to include CJEPS64 as an appendix to his contribution, Mundell at first threatened to reject the solicitation of CMP and instead replace it with his short paper IMFSP. (Harry Johnson Papers, Box 42). The first letter in this correspondence is dated January 26, 1966, and the last December 15, 1966. Thus this correspondence was completed before Mundell edited his papers for Macmillan in 1967.

32 In laying out the complete (three-equation) Mundell system of a small open economy Boughton [2003, 6] draws equations from two separate sources (Kyklos and the appendix of MD). This choice suggests that with the elision from the appendix of these equations in the adaption of MD for International Economics, the Mundell system can not be found anywhere in that book even though it is intended as an integration of his work.

33 In the adapted form in International Economics a footnote has been added to Kyklos [1968e, 231] connecting it to IMFSP. Similarly, for CJEPS61 two footnotes have been added [1968g, 245, 247] noting the contrary finding concerning fiscal policy under flexible exchange rates in CMP. A further long footnote has been added to the adaptation of Kyklos [1968, 226] which presents a mathematical formalization of the discussion of sterilization (or neutralization) policy. This discussion, including the word “quasi-equilibrium,” is very reminiscent of the coverage of this topic in Barter Theory (Mundell [1962b, 456]). This might be further evidence that the writing of Kyklos and Barter Theory took place very close in time (during the period 1961-62). If so, it would validate the dating which we have given for Barter Theory.

34 Obstfeld [2001, 38] and Swoboda [1972, 167] cite the original version of IMFSP but use the title that appears in the adaptation of it in International Economics.