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A new world financial 'non-system' is emerging. It consists of nations with independent central banks
that target inflation and let their exchange rates float, usually without controls on capital flows
and often without intervention. Because the goal of monetary policy is aligned with national interests,
the non-system is remarkably durable; no country has been forced to abandon an inflation-targeting regime.
Participants in the new system experience lower exchange rate volatility and fewer "sudden stops" of capital
flows than their counterparts.
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