An analysis of the financial, economic and political consequences of fluctuating exchange rates.
Written in 1995; 1,350 words; 5 sources; $ 47.95
From the Paper:
"The Problem
Before the Smithsonian Agreement in 1971, which ended the fixed exchange rate system of the Bretton Woods era, currency values were maintained by government economic policies that often included substantial controls on capital and trade. But when the breakup of Bretton Woods did finally occur international economists were not dismayed. Not only did they believe that greater flexibility of exchange rates was a good thing, they also believed that they understood reasonably well how the new system worked (Krugman, 1979).
But over the past twenty-five years the international monetary system has been subjected to one surprise after another, including greater and greater volatility in exchange rates and the potential for dramatic political and social consequences."
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