Owing to dissatisfaction with the IMF’s de jure classification of exchange-rate regimes, a substantial literature has emerged presenting de facto classifications of exchange-rate systems and using the latter classifications to compare performances of alternative regimes in terms of key...

This chapter discusses the dynamic behavior of exchange rates. It focuses on both the exchange rate's response to exogenous disturbances and the relation between exchange-rate movements and movements in such endogenous variables as nominal and relative prices, interest rates, output, and the...