publication . Preprint . 1989

International Monetary Instability Between the Wars: Structural Flaws or Misguided Policies?

Barry Eichengreen;
Open Access
  • Published: 01 Sep 1989
Abstract
This paper reassesses the history of the international monetary system between the wars. It confirms the generality of several widely held interpretations of recent experience with floating exchange rates. There is a positive association between nominal exchange rate variability and real exchange rate variability. But policies of intervention which reduce nominal exchange rate variability do not guarantee a proportionate reduction in nominal exchange rate risk or in real exchange rate variability and unpredictability. A credible commitment to a stable intervention rule is needed to deliver these benefits. The paper then goes on to consider four potential explana...
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