We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
DYNAMIC STABILITY AND THE CHOICE BETWEEN FIXED AND FLEXIBLE EXCHANGE RATES.
- Authors
Tower, Edward
- Abstract
Our results are summarised in the introduction, so perhaps now a word about what our models mean is appropriate. In essence we assessed the choice between pegging the money stock and pegging the exchange rate. This reminds us that it should surprise no one that an economist who advocates a fixed growth rate for the money stock should also advocate flexible exchange rates, for a fixed exchange rate system makes it impossible to fix the money stock without regard for the requirements of foreign balance. Finally, it is the slowness of adjustment under fixed rates that makes adjustment under them costly, and it is this costliness that makes an alleged commitment to them difficult to sustain or believe in, and this is a major cause of instability under the adjustable peg.
- Subjects
MATHEMATICAL models; STABILITY (Mechanics); FOREIGN exchange rates; FOREIGN exchange; ECONOMIC equilibrium
- Publication
Economic Journal, 1977, Vol 87, Issue 345, p81
- ISSN
0013-0133
- Publication type
Article
- DOI
10.2307/2231834