Exchange Rate Arrangements

In this chapter, Professor Larraín covers the different forms of exchanging arrangements and some real-world cases of collapsing exchanging arrangements, or currency crises. A common case of currency crisis takes place when the central bank runs out of international reserves while attempting to keep the exchange rate fixed at a certain level. There are three kinds of exchange rate arrangements: floating, fixed, and intermediate. In each case, the central bank intervenes to different degrees and at different points.

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