Instead of focusing the debate about the conduct of monetary policy on whether the normal exchange rate should be fixed or flexible, the focus should be on whether the monetary policy regime appropriately constrains discretion in monetary policymaking. Three frameworks deserve serious discussion...

1. Introduction -- References -- 2. A General Equilibrium Theory of Exchange Rates and Managed Floating -- 1. Multiple Stochastic Exchange Rate Equilibria -- 2. Price Uncertainty and Flexible Exchange Rates -- 3. A Welfare Analysis -- References -- 3. Empirical Implementation of the Instability...

This volume provides a rigorous and balanced perspective on the causes and implications of dollarization, and the basic policies and options to deal with it: the adaptation of the monetary and prudential frameworks, the development of local-currency substitutes, and the scope for limiting...