News Brief: Statement by IMF Managing Director Michel Camdessus on the Death of Edward M. Bernstein
IMF News, June 12, 1996
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Bibliographic details
- Published: June 12, 1996
Summary of Bernstein’s role and contributions
- Edward Bernstein "died June 8 at the age of 91."
- 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 served as "both the chief technical advisor and the principal spokesman for the U.S. delegation."
- When the Fund opened in 1946, he became the "first Director of Research," a position he held until he left the Fund in 1958.
- Described as "in effect, the chief economist of the Fund," he influenced the institution through conceptual and institutional contributions.
Key intellectual contributions and institutional innovations
- Pioneering ideas and concepts attributed to Bernstein:
- The idea of a composite reserve asset, which "helped make possible the creation of the SDR in 1969."
- Concepts of "stand-by arrangements, conditionality, and surveillance."
- He "attracted many of the brightest economists of his time" to the Fund, including "Sydney Alexander, Marcus Fleming, Robert Mundell, Jacques Polak, Robert Triffin, and numerous others," thereby promoting an international staff of high quality.
Views on inflation, deflation, and policy balance
- Bernstein believed "inflation would be as great a threat as deflation to economic stability after World War II."
- He emphasized balance: the Fund must have enough resources to help members avoid deflation, while also having the means to impose conditionality to help them avoid inflation.
- He consistently advocated that the Fund exercise "firm surveillance" to secure better and more stable macroeconomic policies rather than attempting a return to fixed par values.
Exchange rate regime and trade
- One of his guiding principles 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 to devise an international monetary system to prevent "competitive devaluations and autarky" and to provide incentives for trade and growth.
Later career and reflections
- After leaving the Fund in 1958, Bernstein "took early retirement from the Fund" but continued working for almost forty more years:
- 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 global economic changes at an anniversary luncheon with Executive Directors at the Fund.
- On that occasion he "lamented the massive appreciation of the U.S. dollar that was still underway," noting "disastrous effects on many developing countries as well as on the major industrial countries."
- He argued the solution was "not a 'new Bretton Woods,'" but "better and more stable macroeconomic policies" supported by firm Fund surveillance.
- He remained engaged with the Fund up to the time of the statement: "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."
Key facts and dates
- Date of statement to the IMF Executive Board: June 12 (statement made on June 12).
- Date of death: June 8.
- Age at death: 91.
- Bretton Woods conference: 1944.
- Fund opened: 1946.
- Left the Fund: 1958.
- SDR creation: 1969.
- Anniversary reflection: July 1984 ("exactly forty years after Bretton Woods").
- Post-Fund career span: "almost forty more years" after leaving the Fund.
- Recent engagement: "Just two months ago" attended Seminar on the Future of the SDR.
Implications for the IMF (as expressed by the Managing Director)
- Bernstein's work underlined the need for:
- Adequate Fund resources to counter deflationary risks.
- Conditionality and surveillance to prevent inflationary outcomes.
- A high-quality international staff to maintain the Fund's intellectual leadership.
- Firm surveillance and better macroeconomic policies rather than attempts to recreate par-value systems.
Statement by IMF Managing Director Michel Camdessus to the IMF Executive Board, June 12, 1996; IMF EXTERNAL RELATIONS DEPARTMENT, Public Affairs, Media Relations.