Introduction The floating exchange rate system, in place since 1973, was not well planned before its inception By the mid-1980s, economists and policymakers had become more skeptical about the benefits of an international monetary system based on floating rates a Why has the performance of floating rates been so disappointing? What direction should reform of the current system ake? This chapter compares the macroeconomic policy problems of different exchange rate regimes Copyright C 2003 Pearson Education, Inc Slide 19-3Copyright © 2003 Pearson Education, Inc. Slide 19-3 Introduction ▪ The floating exchange rate system, in place since 1973, was not well planned before its inception. ▪ By the mid-1980s, economists and policymakers had become more skeptical about the benefits of an international monetary system based on floating rates. ▪ Why has the performance of floating rates been so disappointing? ▪ What direction should reform of the current system take? ▪ This chapter compares the macroeconomic policy problems of different exchange rate regimes