If a working party of top-ranking economists were to set out to elaborate a system which would get the worst of every possible world by combining all the disadvantages of the rigid system with those of the flexible system without any of their redeeming features, they could do no better than recommend the ‘crawling peg’ scheme. Very appropriately, a horrid system has been given a horrid name. Recently efforts were made to rename it the ‘dynamic peg’ — presumably because of its essentially undynamic character.
KeywordsExchange Rate Equilibrium Level Rigid System Domestic Price Level External Indebtedness
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