News Brief: Statement by IMF Managing Director Michel Camdessus on the Death of Edward M. Bernstein
June 12, 1996
The Managing Director of the International Monetary Fund, Michel
Camdessus, made the following statement to the IMF Executive Board
on June 12:
"Edward Bernstein, who died June 8 at the age of 91, was a
central figure in the history of the International Monetary Fund.
As deputy to Harry Dexter White at the U.S. Treasury in the early
1940s, he was instrumental in developing both the U.S. plan and
the final compromise for the Fund's Articles of Agreement. At the
Bretton Woods conference in 1944, he was both the chief technical
advisor and the principal spokesman for the U.S. delegation.
When the Fund opened its doors in 1946, he became the first
Director of Research, a position that he held until he left the
Fund in 1958. He was, in effect, the chief economist of the
Fund, and he had an enormous beneficial impact on this institution
for which we are all extremely grateful.
"Throughout his long and productive life, Eddie Bernstein was
keenly involved in and supportive of the work and role of the
Fund. Just two months ago, he attended our Seminar on the Future
of the SDR, at which he was recognized for his pioneering work on
the role of international reserve assets--work that helped make
possible the creation of the SDR in 1969. But the idea of a
composite reserve asset was just one of his many contributions to
the Fund: the concepts of stand-by arrangements, conditionality,
and surveillance all were honed on the anvil of his intellect.
Perhaps, though, his most lasting contribution was that he
attracted many of the brightest economists of his time to work at
the Fund--Sydney Alexander, Marcus Fleming, Robert Mundell,
Jacques Polak, Robert Triffin, and numerous others--and thus
demonstrated that the Fund can and must have an international
staff of the highest quality.
"From the beginning, Eddie believed that inflation would be as
great a threat as deflation to economic stability after World War
II. A hallmark of his writing on this issue, as in everything
that he wrote, was that he saw the need for balance: the Fund
had to have enough resources to help its member countries avoid
deflation, but it also had to have the means to impose the
conditionality that would help them avoid inflation.
"One of Eddie Bernstein's guiding lights throughout his career
was the value of a system of stable exchange rates to promote the
growth of international trade and of world income. Having
witnessed the debacle of the deflation of the 1930s, he worked
tirelessly in the years before Bretton Woods to devise an
international monetary system that would not only prevent a
relapse into competitive devaluations and autarky but also would
provide positive incentives for trade and growth.
"Although he took early retirement from the Fund, Eddie never
retired from studying and writing about the IMF and the
international monetary system. In fact, he worked for almost
forty more years after leaving the Fund, first as the head of his
own consulting firm and later as a guest scholar at the Brookings
Institution. In July 1984, exactly forty years after Bretton
Woods, he reflected on the changes in the world economy during an
anniversary luncheon with Executive Directors here at the Fund.
On that occasion, he lamented the massive appreciation of the
U.S. dollar that was still underway, and he noted that it was
having disastrous effects on many developing countries as well as
on the major industrial countries. But he also recognized that
the solution to the problem was not to try to return to a system
of par values for exchange rates--not a "new Bretton Woods."
Rather, the solution was to have better and more stable
macroeconomic policies. And to get better policies, it was
important for the Fund to exercise firm surveillance. He
believed that the Fund had the means to promote stability, and
that our role was even more important in today's more volatile
world than it had been in the 1950s and 1960s."
IMF EXTERNAL RELATIONS DEPARTMENT
