The group of writers labelled MMM consists of Metzler (1960 [1973: Chapter 8]), Meade (1951a and 1951b), and Mundell (1968). The first two wrote about 1950. Mundell was later but he winds up this era with the beginnings of what is known as the Mundell-Fleming model. Mundell was concerned primarily with policy recommendations, and the Mundell-Fleming literature, which I do not propose to survey extensively, is generally interpreted as being based on a text-book type of IS-LM analysis. Meade's important work has for some reason dropped out of the limelight; it is, like most of his work, too detailed and “complete” to serve as a useful hand-book. Presumably, also, the fact that it puts “wages and incomes” policy on the same footing as “financial” (fiscal plus monetary) policy made it somewhat alien to the spirit of western, particularly anglophone, economics in the post-World War II period.

Metzler's work is on an entirely different analytical footing from the others. It is called “Keynesian” but is much more Wicksellian. Unlike the others, it is not at all policy-oriented. The role of the central bank is simply to buy and sell foreign exchange in order to peg the exchange rate; it is therefore applicable to any regime where exchange rates are fixed and the money supply varies with the balance of payments. I shall deal with it first.

Metzler

Metzler's contribution in this area is the paper, “The Process of International Adjustment under Conditions of Full Employment: A Keynesian View.”