Foreign Exchange Markets With Fiat Money: Flexible Exchange Rates
Fiat Money and Flexible Exchange Rates
With flexible exchange rates, market traders buy and sell foreign exchange at any price they find mutually agreeable. From a historical perspective, the world has limited experience with this exchange rate regime. Most countries with relatively high living standards, however, have employed flexible exchange rates since the early 1970s. Although a smaller portion of less developed countries operate with flexible exchange rates, their numbers have increased markedly following the collapse of socialist economies in the 1990s.
Short-Run Exchange Rate Determination
Analysis of price determination in markets with flexible exchange rates ...
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