RIP Jacques Polak

Jacques Polak, the revered IMF economist passed away on February 26, 2010.

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.

IMF named its annual conference after him to testify his contribution to IMF and economic research.

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