Abstract

Exchange rate management is one of those subjects in economics on which consensus is always difficult to obtain, even in the IMF, where it is at the core of the institutional work. The difficulty of achieving consensus arises because of two very complex links, one between exchange rate policy and other economic policies, and the other between exchange rate policy and economic performance in terms of output growth, employment and inflation levels, and balance of payments developments. The complexity of these relationships leads to different views on the way exchange rate policy operates when it is integrated with macro- and microeconomic policies, and also on the role it plays in terms of ultimate policy objectives, which are, of course, sustained growth, full employment, a viable external payments position, and low inflation.

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Proceedings of the Seminar Coordination of Structural Reform and Macroeconomic Stabilization, Washington, D.C., June 17-26, 1993