Exchange Rate Regimes in the Modern Era
266 pp., 6 x 9 in, 10 figures, 38 tables
- Published: August 17, 2012
- Published: November 20, 2009
- Published: August 24, 2012
An analysis of the operation and consequences of exchange rate regimes in an era of increasing international interdependence.
The exchange rate is sometimes called the most important price in a highly globalized world. A country's choice of its exchange rate regime, between government-managed fixed rates and market-determined floating rates has significant implications for monetary policy, trade, and macroeconomic outcomes, and is the subject of both academic and policy debate. In this book, two leading economists examine the operation and consequences of exchange rate regimes in an era of increasing international interdependence.
Michael Klein and Jay Shambaugh focus on the evolution of exchange rate regimes in the modern era, the period since 1973, which followed the Bretton Woods era of 1945–72 and the pre-World War I gold standard era. Klein and Shambaugh offer a comprehensive, integrated treatment of the characteristics of exchange rate regimes and their effects. The book draws on and synthesizes data from the recent wave of empirical research on this topic, and includes new findings that challenge preconceived notions.
In the aftermath of the global financial crisis, our need for a deeper understanding of the causes and consequences of international monetary and financial arrangements is clearer then ever. Exchange rate regimes in the modern era have shaped trade patterns, capital flows, reserve accumulation, monetary policies, inflation rates, and many other facets of the world economy, including the crisis itself. Klein and Shambaugh masterfully lay out the theories behind these mechanisms and expose their practical import with clear and arresting evidence in a book that is required reading for anyone interested in the global macroeconomic architecture of the twenty-first century.
Alan M. Taylor, Professor of Economics, University of California, Davis
There are many theories of how economies behave under different exchange-rate regimes. This book provides the facts—a comprehensive analysis of macroeconomic performance under various types of exchange-rate regimes. This book will contribute enormously to the policy debate.
Charles Engel, Department of Economics, University of Wisconsin, Madison