Fixed exchange rates promote international coopera...
2025年09月26日
Fixed exchange rates promote international cooperation
Another argument in favor of fixed exchange rates is that they necessitate a degree of international cooperation and coordination between countries that is generally absent under floating exchange rates.Countries that agree to peg their exchange rates generally have to agree on measures to be undertaken when the agreed exchange-rate parity comes under pressure.At a minimum, fixed exchange rates require an agreement to avoid conflicting exchange-rate targets ruling out the dangers of competitive devaluation scenarios as occurred in the 1930s.The enhanced degree of international cooperation should bring benefits and lead to a more stable environment for the conduct of international trade and investment.