The exchange rate regime does make a difference for inflation performance. It is difficult to infer its effect on growth, but policy variables, and other variables influencing economic activity, do have different effects on growth under different exchange-rate arrangements

When average incomes rise, the average incomes of the poorest fifth of society rise proportionately. This holds across regions, periods, income levels, and growth rates. But relatively little is known about the broad forces that account for the variations across countries and across time in the...