Fixed Vs Flexible Exchange Rates

Giancarlo Gandolfo

Chapter 17 in International Finance and Open-Economy Macroeconomics, 2016, pp 423-454 from Springer

Abstract: Abstract It may seem that the old debate on fixed and flexible exchange rates has been made obsolete by international monetary events, as the international monetary system abandoned the Bretton Woods fixed exchange rate regime (of the adjustable peg type) in the early 1970s, and is now operating under a managed float regime mixed with others (see Sect. 3.3 ); nor does it seem liktractely that freely flexible exchange rates will be generally adopted or fixed ones will return. However, a general outline of the traditional arguments is not without its uses, because many of these keep cropping up. The reference to aspects already treated in previous chapters will allow us to streamline the exposition. In examining the main pros and cons of the two systems it should be borne in mind that the arguments for one system often consist of arguments against the other.

Keywords: Exchange Rate; Monetary Policy; Current Account; Money Supply; Money Demand (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1007/978-3-662-49862-0_17

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