Alternative exchange-rate systems. A rejoinder
Keywords:Exchange rate regimes, floating rates, sliding parities, fixed rates
The article is a brief response to Goldstein and Cohn’s paper on alternative exchange-rate systems in which empirical evidence is exhibited which does not favour either fixed or floating rates in dampening the effect of a disturbance to the rest of the world. From this result, they argue for a “reasonably clean floating rates”. The authors argue that the usefulness of Goldstein and Cohn’s results is somewhat limited by the simple model that they use. More importantly, they neglect to show any reason why the authors’ other propositions would not lend some support to a system of sliding parities.