The Evolution of Thought on Intermediate Exchange Rate Regimes

Bibliographic Data

ID9749307
AuthorsJohn Williamson (0000-0001-8085-7853, LSE and Princeton Universities, corresponding author)
Year2002
Volume579
Issue1
Pages73-86
Publication date2002-01-01
Open AccessYes
TypeARTICLE
VenueThe Annals of the American Academy of Political and Social Science (JOURNAL)
Journal identifiersISSN: 0002-7162 • E-ISSN: 1552-3349
PublisherSAGE Publications (PUBLISHER • US)
DOI10.1177/000271620257900106
OpenAlexW4247045924, W2134810910, W4237835973
LanguageEN
Citations received1
References cited5

This article traces the origins and evolution of proposals for exchange-rate regimes intermediate between fixed and floating rates. The origins are traced to Keynes's interwar writings. Keynes's ideas were revived in the 1960s literature on the (wide) band proposal and crawling peg and developed in the 1970s by the literatures on the reference rate proposal and optimal peg. The target zone proposals of the 1980s combined the band proposal and the crawling peg. Paul Krugman showed that a credible target zone would make speculation stabilizing. In the 1990s, a number of emerging markets employed such regimes until they were swept away in crises. This spawned the bipolar view, which asserts that in a world of capital mobility, countries have to choose between firmly fixed and freely floating rates. The article concludes by arguing that even the most attenuated form of intermediate regime, the reference rate proposal, would carry advantages over a floating regime

Capital (architecture · Economics · Exchange rate · Exchange-rate regime · Fixed exchange rates · Keynesian economics · Macroeconomics · Monetary economics · Neoclassical economics · Speculation · Economic Theory and Policy · Global Financial Crisis and Policies · History

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