The exchange rate is a crucial variable linking a nation's domestic economy to the international market. Thus choice of an exchange rate regime is a central component in the economic policy of developing countries and a key factor affecting economic growth. Historically, most developing nations...

The argument of this paper is that growing capital mobility is unavoidable. Domestic financial liberalization and the revolution in information and communications technologies make it much more difficult to stop capital flows at the border. Effective controls will therefore have to become...