Exchange-rate volatility is a problem for trade … especially when financial development is low

Jérôme Héricourt, Sandra Poncet 19 January 2013

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The increasing volatility of exchange rates after the fall of the Bretton Woods agreements has been a constant source of concern for both policymakers and academics. Developed countries fought hard in the 1980s to limit US dollar fluctuation (one thinks of the Plaza and Louvre’s agreements, respectively in 1985 and 1987), and some European countries took an even more radical decision by giving up their national currency for the euro in 1999.

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Topics:  Exchange rates International trade

Tags:  China, trade, exchange-rate volatility