The exchange rate is sometimes called the most important price in a highly globalizedworld. A country's choice of its exchange rate regime, between government-managed fixed rates andmarket-determined floating rates has significant implications for monetary policy, trade, andmacroeconomic outcomes, and is the subject of both academic and policy debate. In this book, twoleading economists examine the operation and consequences of exchange rate regimes in an era ofincreasing international interdependence.
Michael Klein and Jay Shambaugh focus onthe evolution of exchange rate regimes in the modern era, the period since 1973, which followed theBretton Woods era of 1945--72 and the pre-World War I gold standard era. Klein and Shambaugh offer acomprehensive, integrated treatment of the characteristics of exchange rate regimes and theireffects. The book draws on and synthesizes data from the recent wave of empirical research on thistopic, and includes new findings that challenge preconceived notions.
