Harry Gordon Johnson
One of Johnson’s early articles on international trade showed that a country with monopoly power in some good could impose a tariff and be better off, even if other countries retaliated against the tariff. His proof was what is sometimes called a “possibility theorem”; it showed that such a tariff could improve the country’s well-being, not that it was likely to. Johnson, realizing the difference between what could be and what is likely to be, was a strong believer in free trade. Indeed, he often gave lectures in his native Canada excoriating the Canadian government for its protectionist policies and arguing that Canada could eliminate some of the gap between Canadian and U.S. standards of living by implementing free trade.
In international finance Johnson’s seminal 1958 paper named the growth in the money supply as one important factor that affects a country’s balance of payments. Before then, economists had tended to focus on nonmonetary factors. Johnson’s article began what is now called the monetary approach to the balance of payments.
In the field of monetary economics Johnson made an early attempt to do for Britain what milton friedman and Anna Schwartz were doing for the United States: measure the money supply over time. Although he did not achieve as much in this area as Friedman and Schwartz did, his work led to other, more careful and detailed studies of the British money supply. In 1959, after having been a professor at the University of Manchester in England, Johnson moved to the University of Chicago as the token “Keynesian.” He learned a lot from monetarist Milton Friedman and others at Chicago, just as he had learned from Keynesians in England. Although never a monetarist himself, Johnson became increasingly sympathetic to monetarist views.
One of his classic articles, written in his early years at Chicago, is his 1962 survey, “Monetary Theory and Policy.” The article is a graduate student’s delight—tying together apparently disparate insights by other economists, pointing out their pitfalls, and laying out an agenda for future research—all in a clear, readable style that still manages not to sacrifice subtle distinctions.
In a relatively short career Johnson wrote 526 professional articles, forty-one books and pamphlets, and more than 150 book reviews. He also gave a prodigious number of speeches. According to paul samuelson, when Johnson died he had eighteen papers in proof. (Commented Samuelson: “That is dying with your boots on!”) Johnson also earned many honors. In 1977, for example, he was named a distinguished fellow of the American Economic Association, and in 1976 the Canadian government named him an officer of the Order of Canada. Johnson graduated from the University of Toronto in 1943 and earned his Ph.D. from Harvard in 1958.
1953. “Optimum Tariffs and Retaliation.” Review of Economic Studies 21, no. 2: 142–153.
1959. “British Monetary Statistics.” Economica 26 (February): 1–17.
1961. “The ‘General Theory’ After Twenty-five Years.” American Economic Review 51 (May): 1–17.
1963. The Canadian Quandary: Economic Problems and Policies. Toronto: McGraw-Hill.
1969. Essays in Monetary Economics. 2d ed. Cambridge: Harvard University Press.
1971. “The Keynesian Revolution and the Monetarist Counter-revolution.” American Economic Review 61 (May): 1–14.
1972. Further Essays in Monetary Economics. London: George Allen and Unwin.
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Vernon Smith on Markets and Experimental Economics. EconTalk Podcast. Includes Vernon Smith's personal recollections about Harry Johnson.