This paper's field evidence is: (1) many official sectors rapidly forget the damage of the 1982-85 exchange rate liquidity crisis and reverted to what caused that crisis, namely a closed economy clean floats perspective; and (2) the 2006-2008/9 exchange rate liquidity shock would have been more...

Mundell's optimal currency area model has been misconstrued, being at base an argument against multiple currencies as Mundell himself stated in that paper and frequently since. This paper shows two things. First use of this model has generated beggar-thy-neighbour advice concerning exchange rate...

The paper traces the dangers in the closed economy perspective of a monetary policy focused on adomestic inflation goal under a clean float. Field evidence of the damage wrought from this perspective isreinforced by that from a laboratory experiment. The laboratory experiment avoids measurement...

Variance of exchange rates around predictions can be from 1) undiscovered fundamentals, 2) efficient markets, 3) destabilising speculation, or 4) regime and personality differences in the heuristics used in the stage of evaluating alternatives. Field and experimental evidence identifies 4) as...