Floating Exchange Rates: the Lessons of Experience

Roy A. Batchelor and Geoffrey E. Wood

Chapter 1 in Exchange Rate Policy, 1982, pp 12-47 from Palgrave Macmillan

Abstract: Abstract Economists often make bad predictions and hand out bad advice. As often, their excuse is that the world never stands still long enough to allow current theories to bear fruit in the fields of prediction and policy-making. This excuse can, however, hardly be advanced in discussions of exchange rate theory or policy; our experience of exchange rate regimes has been extraordinarily rich, and the changes in those regimes have followed a clearly discernible pattern: In the twentieth century alone, international trade and payments among developed nations have been conducted in three periods under fixed exchange rates—the pre-1914 gold standard, the resurrected gold standard of the late 1920s and early 1930s, and the de facto dollar standard of the 1950s and 1960s — and in the three succeeding periods of floating exchange rates — in the 1920s, the mid-1930s, and the 1970s.

Keywords: Exchange Rate; Monetary Policy; Real Exchange Rate; Purchase Power Parity; Exchange Rate Regime (search for similar items in EconPapers)
Date: 1982
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DOI: 10.1007/978-1-349-16863-7_2

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