Should We Return to Fixed Exchange Rates?
There has been growing dissatisfaction with the current system of managed floating exchange rates, leading a small but increasing number of economists, policymakers, and journalists to call for a return to a system of limited exchange-rate flexibility. One group advocates a return to the gold standard. At the 1984 Republican National Convention, for example, several members of the platform committee favored a return to the gold standard as a vehicle to sustain domestic price stability and to restore international monetary soundness. Others have harbored the view of returning to a system of more stable exchange rates similar to the Bretton Woods system, with an important role ascribed to the dollar.
The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. The series editor is Tasia Hane. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. This paper and its data are subject to revision; please visit clevelandfed.org for updates.