Increasing Stability in the Mix of Exchange-rate Policies.

Abstract

This paper is an examination of the experience of exchange-rate policy systems since 1996 and a comparison with the experience of 1978 to 1995. Exchange-rate policy has become more stable than it was in the earlier period. In addition, it has become polarized, with almost all countries choosing either a fixed exchange-rate regime (especially in low-GDP countries) or a floating exchange-rate regime (especially in high-GDP countries). Limited-flexibility exchange-rate systems have become unimportant.