The ongoing credit crunch represents the fi rst crisis of the age of mass securitization. One conclusion sometimes drawn is that the costs of securitization, in the form of risks to fi nancial stability, exceed the benefits. The implication is that we should return to the simpler days when...

It is appropriate to conlude on a modest note. Economists really know little about the costs and benefits of monetary unification. We have trouble modelling the increase in economic efficiency associated with a single currency, and we disagree about value of an independent monetary policy.

This essay considers strategies that developing and emerging-market economies might use when seeking to exit from currency pegs. It also considers techniques for completing the move to greater flexibility, as well as the scope for adopting inflation targeting as a nominal anchor following an...