Beyond Fixed Parities: The Analytics of International Monetary Agreements

  • Ronald I. Mckinnon


The breakdown of fixed exchange rates within the European Monetary Union — with the separate floats of Britain, Italy and France — has coincided over the 1971–4 period with the broader collapse of the Bretton Woods and Smithsonian agreements, which were designed to keep exchange rates within more or less narrowly defined bands. Fortunately, the floating of exchange rates has so far prevented inconvertibility among major currencies. Yet these floating rates have also been associated with high international inflation, continued large changes in relative currency values, and erosion in the confidence that individuals had in fiat money whatever its national origin.


Exchange Rate Monetary Policy Central Bank Commercial Bank Money Supply 
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Copyright information

© Graduate School of Business, University of Chicago 1977

Authors and Affiliations

  • Ronald I. Mckinnon

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