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Fear of Floating

from Asad Zaman

Published in Dawn, Mar 27, 2019, a leading Pakistani newspaper, in context of public debate about moving to a floating exchange rate regime —

In 1971, when Nixon shocked the world by abandoning the convertibility of dollars to gold, he dragged all of us, unwillingly, into the modern era of floating exchange rates. Since then, economic theories have changed. But old habits die hard; economists and policymakers today continue to think and operate as if they live in the old world. This article examines the question of fixed versus floating exchange rate regimes from the new perspective of Modern Monetary Theory (MMT).  read more

  1. April 15, 2019 at 1:53 am

    Yes. You have an accurate aspect, even though it is important to remember France had devised a system of transferring major quantities of gold from the US to France.

    I prefer to see research directed toward a fixed exchange rate where the ideal monetary unit is equal to one kilocalorie. The standard accounting system would work even better and the international variance between currency valuations would measure something like social and ecological efficiency.

  2. Greg Hannsgen
    April 15, 2019 at 7:50 pm

    Thanks. I find myself more or less in agreement.

  3. Helen Sakho
    April 19, 2019 at 1:24 am

    One kilo of gold equals one kilo of good spices. At times of general hunger, strife and collapse of too many economies due to corruption, corruption and more corruption, let us, for once, talk about the migrants that are falling off the boats floating in the cold oceans to reach the shores of “modernity” just to survive. I believe they are almost all from the MENA regions.

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