Abstract
The present subject would probably appear puzzling to most central bank officials. Those officials who have been associated with the operation of the European Monetary System (E.M.S.) would assume without too much argument that the adjustable peg has proved to be a viable option. Nevertheless it is right that the question should be put. After all, the Bretton Woods system broke down because the adjustable peg was in the long run not compatible with a high and increasing degree of capital mobility. This feature of the system, combined with long periods of rigid exchange rates, created one-way options for speculators in the exchange markets. These options were too powerful to be resisted by the authorities. It is also legitimate to pose the question simply in view of the fact that very few people would think today that the adjustable peg is a viable option for linking the two or three major currencies: the dollar, the DM and the yen.
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© 1984 Martinus Nijhoff Publishers, The Hague, Boston, Lancaster
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Thygesen, N., Korteweg, P., Salin, P. (1984). Is the adjustable peg a viable option?. In: Salin, P. (eds) Currency Competition and Monetary Union. Financial and Monetary Policy Studies, vol 8. Springer, Dordrecht. https://doi.org/10.1007/978-94-009-6077-0_8
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