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Professor Harry G. Johnson, the economist, died on May 8 at the age of 53. His death rated a longish obituary in the New York Times, but went unremarked on the evening news shows. For Professor Johnson was not a public figure. He never deigned to wallow in the swamps of political economy. Rather, he was the quintessential economic scientist. Even his closest friends were hard put to discover his ideological bent, for Harry Johnson professed none. More than that, he escaped all the neat taxonomies: in manifold books and professional‐journal articles, he attacked Keynes where he felt the great Lord was wrong; he criticized the Neoclassicists for their myopia; and he remained distrustful of what he viewed as the overly simplistic analytics proffered by Milton Friedman, his senior colleague at the University of Chicago.

This paper is concerned with the optimum solution for the adjustment problem. It is obvious from the outset that it is much easier to discuss non‐optimum solutions, or the pessimum solution, than to discuss the optimum solution. That remark needs to be qualified, however: there would be no problem, and no need for a solution, if the world were so arranged that adjustment took place painlessly and automatically. The difficulties arise for several reasons, of which the more important are that changes occur that are unforseen and to which adjustment is painful; that the process of political government offers possibilities of palliating or reducing the pain at least in the short run by interfering in one way or another with whatever system of adjustment is generally thought to exist; and that these interferences tend both to create inefficiency in the operation of the economy and to aggravate the adjustment problem by impeding adjustments that might otherwise occur without too much difficulty and by allowing disequilibria to cumulate.

1976 was a double bicentennial year for American economists. On the one hand, it was the bicentennial year of the establishment of the United States of America as an independent, self‐governing country — an event that in recent years has become far more of a commonplace occurrence than it was in those revolutionary days two centuries ago. On the other hand it was the bicentennial of the publication of the first volume of Adam Smith's Wealth of Nations, the book that launched our discipline and gave it much of its pedagogic content and structure, at least until the Keynesian Revolution introduced the familiar textbook division between micro‐economics and macro‐economics. (1776, incidentally, was also the year of publication of Bentham's A Fragment on Government and Turgot's Six Edicts; not to speak of Gibbon's Decline and Fall of the Roman Empire, a monumental scholarly work that probably should have received much more serious attention in the time of American bicentennary self‐congratulation and hoopla than it did.) The coincidence of the bicentennary of economics and of the United States naturally suggests combination of the two, in a discussion of what, if anything, are the distinctive and distinguishing characteristics of the American tradition in economics.

The main aims of this paper include a revision of the essentials of the monetary approach to the balance of payments by constructing a monetary model, an extension of the model to explain the importation of inflation in an open economy and an application of the formulated model to the two small open economies, the Netherlands and Singapore. The most important contribution of the monetary approach to the balance of payments is its focus on the role of money as opposed to the focus of traditional approaches on the real variables and on the current account of the balance of payments. Influenced originally by Johnson (1972), there have been several theoretical as well as empirical analyses supporting the major contentions of the monetary approach to the balance of payments. Notable among these are Mussa, Frenkel and Johnson (1975), Kemp (1975), Whitman (1975), and Kreinin and Officer (1978). On the basis of common elements enclosed in the writings of these authors, it is possible to construct such a model and then solve it, first, for foreign reserves inflow, and second, for the domestic inflation rate as a dependent variable. This formulation is similar to the ones found in Bhatia (1982) and Salvatore (1983), but is broader in its implications. A check of the validity of the relationships of the monetary model is also attempted by using the annual data of the Netherlands and Singapore.

The purpose of this paper is to review the literature on the determinants of the exchange‐rate by examining the flow theory approach, purchasing power parity theory, the monetary approach and the assets market approach.

Latvia, a small country on the Baltic Sea, became independent in 1918, but was occupied by the Soviet Union in 1940. Like its neighbours, Estonia and Lithuania, Latvia has a skewed resource pattern, small domestic market, and an export concentration into commodities. Prior to the Soviet occupation, these three countries never managed to form an economic union to overcome the disadvantages of the small size of the domestic markets in the era of assembly line technology. They practiced “Alleingang” in economic and political matters. After gaining independence in 1991, the Baltic countries learned nothing from the past and have continued practicing “Alleingang” in the age of “high tech”.

This paper is an application of the Girton‐Roper (G‐R) exchange market pressure model to Mexico for the period 1953 through 1980. The analysis is both a test of the basic thesis of the model as well as an attempt to incorporate improvements in the model as suggested by recent literature on the monetary approach to the balance of payment.

Under the authoritarian rule of Enver Hoxha, Albania pursued one of the more unusual variants of a planned economy, increasingly isolated from the rest of the socialist world. In this chapter, the authors consider the interplay between the Hoxha’s policy of economic isolationism and the economics produced in isolation. Several conclusions can be drawn. First, much like in other authoritarian regimes, economic theory did not drive economic policy; rather political ideology determined policy; economic theories were retroactively constructed and used as justification. Second, authoritarian-decreed economic theory (dogma) meant that the job of Albanian economists was distinctly different from what we observe elsewhere. Albanian economists played two roles – propaganda for regime positions and technical support for regime policies. Third, and most uniquely Albanian, economic and political isolation created an echo-chamber where theory was functionally irrelevant to policy-making or practice. Decreed economic theory was substantively empty, and new ideas were shut out. This had profound implications for Albania’s eventual transition to a market economy.

A strike is not the only available collective sanction open to a dissatisfied workforce, which may have recourse to alternative forms of militant action such as the go‐slow or overtime ban. Nevertheless, despite their well known limitations, strike statistics constitute the only available quantitative barometer of overt and organised industrial conflict. In order to explain the incidence of strike action at an aggregative level a number of studies have been carried out in recent years which test quantitative relationships via the use of multiple regression techniques and which postulate an economic interpretation of strike activity. The advantage of the quantitative approach as a method of analysis and insight into the relationships involved is that it “replaces improvised ad hoc explanations of strike activity with a behavioural model which….does yield refutable implications”. That is, in terms of providing more solid and systematic empirical knowledge, its performance is testable and, by amendments and refinements, capable of improvement.