Exchange rate regimes and policies: a general view

Vol. 21 No. 3 (2001)

Jul-Sep / 2001
Published July 1, 2001
PDF-Portuguese (Português (Brasil))
PDF-Portuguese (Português (Brasil))

How to Cite

Corden, W. Max. 2001. “Exchange Rate Regimes and Policies: A General View”. Brazilian Journal of Political Economy 21 (3):471-88.

Exchange rate regimes and policies: a general view

W. Max Corden
Chung Ju Yung Distinguished Professor of International Economics and Business at the Johns Hopkins University, Paul H. Nitze School of Advanced International Studies – SAIS, Washington/DC, United States.
Brazilian Journal of Political Economy, Vol. 21 No. 3 (2001), Jul-Sep / 2001, Pages 471-488


This article lays out the general economic principles of exchange rate policy and provides an overview of the four country cases that have been included in this special edition of the journal: Mexico, Brazil, Argentina, and Venezuela. Three main currency regimes are discussed – the fixed but adjustable regime (FBAR), the firmly fixed rate, and the floating rate regime. At the same time, the article distinguishes between two main approaches to exchange rate policy: the nominal anchor approach and the real targets approach. The author identifies the costs and benefits of implementing these various exchange rate regimes through the different phases of macroeconomic stabilization and structural adjustment. Although dollarization has become increasingly discussed as another monetary policy option in Latin America, the author notes that this trend is still too incipient to address at any length in this article.

JEL Classification: F31; F32.

Keywords: Exchange rate regime exchange rate policy liberalization