Floating exchange rates at fifty

Fifty years ago, in March 1973, the major industrial economies abandoned fixed exchange rates based on gold, conclusively ending the post–World War II Bretton Woods arrangements. Proponents believed their action would strengthen countries' ability to deal with balance of payment problems. But opponents feared it would instigate a new era of instability and financial shocks. Since 1973, the world has moved away from fixed exchange rates to intermediate regimes based on considerable exchange rate flexibility. But international trade conflicts and unstable capital flows, along with a rise in…