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John Holmes MAKIN


John Holmes MAKIN, economist in the field of Domestic Monetary and Fiscal Theory and Institutions; Balance of Payments; International Finance; Business Finance and Investment. Federal Reserve Bank Chicago Fellow, 1968-1969; Advisory Board, Center Study Banking and Finance Markets, University Washington, since 1983.


MAKIN, John Holmes was born in 1943 in Brattleboro, Vermont, United States of America.


Bachelor of Arts Trinity College, Hartford, Connecticut, 1965. MAM, Doctor of Philosophy University Chicago, 1969, 1970.


Instructor, Assistant Professor, Association Professor of Economics, University Wisconsin-Milwaukee, 1969-1970, 1970-1971, 1972-1976. Visiting Association Prof Economics, University Virginia, 1973, University British Columbia, 1975-1976. Association Professor of Economics, University Washington, 1976-1978.

Senior International Economics, United States Department Treasury, 1971-1972. Visiting Scholar, Federal Reserve Bank San Francisco, 1977. Consultant, United States Department Treasury, 1972-1980, International Monetary Fund, 1981, 1982-1983.

Professor of Economics, Director Institute, Institution Economics Research, University Washington, Seattle, Washington, United States of America, since 1978, since 1983. Research Assistant, National Bureau of Economie Research, New York, New York, United States of America, since 1980. Editorial Board, J Economics and Business, 1979-1982.


  • Federal Reserve Bank Chicago Fellow, 1968-1969. Advisory Board, Center Study Banking and Finance Markets, University Washington, since 1983.



Early work concentrated on functioning of the failing Bretton Woods international monetary system. Major contributions included: estimation of asset demand equations for central banks showing sensitivity to expected returns on dollars and gold in reserve holding decisions by central banks. Implications of central bank switching between holdings of dollars and gold for the viability of the dollar-exchange standard.

And analysis of the ability of Special Drawing Rights to coexist with other reserve assets that accurately predicted their lack of widespread acceptance in subsequent years. A series of empirical articles on the Eurodollar market helped to dispel the ‘mystery’ surrounding that new phenomenon by showing that the Eurodollar system operated much like a fractional reserve system of financial intermediaries already familiar to students of money and banking. This body of work led to investigation of the effect of increased exchange rate flexibility on demand for reserves by central banks. Further investigation of the effects of exchange-rate flexibility on real trade volume suggested that no systematic link existed. In a series of articles applying standard portfolio theory to the management of foreign-exchange risk, it was shown that financial managers can deal with such risk by altering payables and receivables in different currencies to achieve an optimal set of long and short positions in various major currencies.

Viewed in this way the forward market is only a residual means to adjust exposure, not the only means, as suggested by some analysts. A series of articles, begun with Maurice Levi and completed on my own, investigated behaviour of real and nominal interest rates employing reduced-form equations derived from an articulated structure of both closed and open economies. The procedure shows that the popular Fisher equation really should be viewed as a reducedform equation, and this paved the way for interpreting results of estimated equations for interest rates in a way that explains why — despite taxes on interest earnings — most estimated coefficients attached to expected inflation lie below unity.