Inflation and Monetary Institutions in Developing Countries

  • Michael Kuczynski
Part of the International Economic Association Series book series (IEA)


The ‘developing’ countries with which this note is concerned might have been identified otherwise fifty years ago. Nowadays they comprise the clientèle, actual or potential, of the international lending agencies. To stress the importance of the international economy in their inflationary and financial experience, they will be labelled here ‘peripheral’ countries. Diverse as they are, they share a distinctive feature which derives from populousness and late-coming to modern industry: across most of their economic activity, in the same product lines, strikingly different levels of labour productivity co-exist. This is true in primary, secondary, and tertiary production; in metal-working as in construction, in textiles as in agriculture, in household services as in mining, etc. Both the absolute gap between high and low productivity, and the persistently high proportion of total output which is low-productivity in origin, are remarkable. Clearly in any economy as it grows the competitive process will keep recreating a spread of different levels of labour productivity. What is distinctive about peripheral countries is the marked bipolarity of their distribution of productivity levels. Indeed, in the analysis of their relationship to the international economy and to inflation, this is their central feature.


Monetary Policy Capital Inflow Export Price Real Demand Peripheral Country 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Hotelling, H. (1929) ‘Stability in Competition’, Economic Journal, vol. 39, no. 153, pp. 41–57CrossRefGoogle Scholar
  2. Kaldor, N. (1971) ‘Conflicts in National Economic Objectives’, Economic Journal, vol. 81, no. 321, pp. 1–16CrossRefGoogle Scholar
  3. Kuczynski, M. (1976) ‘Semi-developed Countries and the International Business Cycle’, Bank of London and South America Review, vol. 10, no. 1, pp. 2–14Google Scholar
  4. Polak, J. J. and Rhomberg, R. R. (1962) ‘Economic Instability in an International Setting’, American Economic Review, vol. 52, no. 2, pp. 110–18Google Scholar
  5. Smith, Adam (1776) Inquiry into the Nature and Causes of the Wealth of Nations, I, 3.CrossRefGoogle Scholar
  6. United Nations (1949) Inflationary and Deflationary Tendencies 1946–48, New York.Google Scholar
  7. Wojnilower, A. M. (1980) ‘The Central Rôle of Credit Crunches in Recent Financial History’, Brookings Papers on Economic Activity, No. 2, pp. 277–339Google Scholar

Copyright information

© International Economic Association 1987

Authors and Affiliations

  • Michael Kuczynski
    • 1
  1. 1.University of CambridgeUK

Personalised recommendations