Exchange Rates and Economic Policy in the 20th Century

Throughout the 20th century exchange rate mechanisms have been high on the agenda of economic policymakers.

Popularly, a country's exchange rate may be seen as a reflection of the economic virility of an economy, and as a matter of prestige.

In theory, the rate is an outcome of the competitiveness of the economy in engaging in international trade, but is itself also a key determinant of that international competitiveness.

Countries which over-ambitiously aim for high exchange rates may fail to create favourable structural change, an in consequence they may experience the debilitating impact of low investment, deindustrialization and mass unemployment.

Thus the rate chosen is a key influence on economic growth, competitiveness, trade, investment, consumption, saving, money supply, expectations, industrial structure and structural change, employment, and the government's budget.

In compiling this volume, the editors have attempted to create an international perspective on critical issues concerning exchange rates and economic policy in the 20th century. A critical part of this debate is the weaving together of empirical observations of actual exchange rate experiences and the theoretical foundations of exchange rate economics.