Jacques Polak, Iconic Economist at the IMF, Dies at 95

Author:James Rowe
Position:IMF Survey online
SUMMARY

Jacques Polak, who was present at the creation of the International Monetary Fund in 1944 and provided the intellectual foundation for its basic economic approach, died February 26. He was 95.

 
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Dr. Polak, a native of the Netherlands, was a member of his nation’s delegation to the Bretton Woods Conference in New Hampshire where the idea of both the IMF and the World Bank was hatched. He was thought to be one of the last surviving participants in the conference.

"It is with great sadness that I have learned of the passing of Jacques Polak, an iconic figure in the long history of the International Monetary Fund. Jacques’s distinguished career as an economist-a career that spanned seven decades-established him as a leader of critical thought during the post-war evolution of the global economy," IMF Managing Director Dominique Strauss-Kahn said in a statement.

As a 32-year-old wunderkind who already had developed an important model of the world economy, Dr. Polak signed on to the fledgling IMF in 1947 as member of its Research Department. He became Research Director in 1958 and added the position of Economic Counsellor in 1966. He retired formally in 1979, but served the Fund in a variety of roles almost until his death.

During the three decades he was a senior IMF official, Dr. Polak played a major role in the development of the international monetary system: its creation in the years immediately following World War II and its recalibration in the early 1970s after the demise of the global fixed exchange rate system. He was instrumental in the development of Special Drawing Rights (SDRs)-the international reserve asset that was utilized as recently as last year to bolster international liquidity during the global financial crisis.

But it was his development of the eponymous Polak Model in 1957 that both Dr. Polak and colleagues agree was the economist’s most important contribution both to economics and to the institution he served for six decades.

The Polak Model explained a country’s balance of payments in monetary terms, enabling economists to understand the causes of a country’s international economic imbalances. By locating the source of balance of payments problems in domestic credit creation, the model gave the IMF the ability to prescribe the steps a nation in economic distress should take to correct them.

"There must be literally hundreds of papers that take off from the Polak Model and hundreds of Fund programs that utilized it," Mohsin Khan, a former IMF official and colleague of Dr. Polak’s, said in an interview in 2008. "The genius of the model is that it straddles "both theory and operational work."

Dr. Polak left the...

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