Two macroeconomic constraints determine the credibility of an exchange rate system: the availability of foreign exchange and the sustainability of fiscal balance. The following paper analyses the relative importance of these constraints for fixed and flexible exchange rate systems, examines the...

Contrary to the expectations of those who advocated flexible exchange rates prior to 1973, Williamson, in his study on exchange rate flexibility and reserve use, presented data which suggested “the paradoxical conclusion that reserve use actually increased following the adoption of...

In a recent editorial (cf. INTERECONOMICS, No. 3/1984, p. 101) Professor Armin Gutowski commented on the surprising increase of the external value of the US dollar which seems to defy traditional explanations of exchange rate determination. The following article presents an American...

The following article deals with the reasons for the fierce resistance of the developing countries to the system of floating exchange rates which the industrialized countries are favouring at present. It examines the consequences of floating exchange rates for the foreign trade, indebtedness and...

This paper highlights that the EMU transition process itself can pose challenges to individual accession countries and draws policy implications for ERM II. Differences in financial market development and international liabilities underscore the risks and benefits of ERM II, and may lead to...