Journal Article

Why markets in foreign exchange are different from other markets

Abstract: This paper, originally published in the fall 1979 Quarterly Review, explains why unfettered markets cannot determine a price at which the currency of one country exchanges for that of another. In effect, any price will work--something which is not true in other markets. The paper then argues that the only feasible regimes for these special markets are floating exchange rates with capital controls or fixed exchange rates with monetary and budget policy coordination. ; Originally published in Quarterly Review, Fall 1979.

Keywords: Foreign exchange;

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Bibliographic Information

Provider: Federal Reserve Bank of Minneapolis

Part of Series: Quarterly Review

Publication Date: 1990

Volume: 14

Issue: Win

Pages: 12-18