Many economists argue that a flexible exchange rate regime is preferable to a fixed exchange rate regime because it helps to insulate the domestic economy from adverse external shocks. For example, ...

Examples of currencies with fixed exchange rates include the Hong Kong dollar (pegged to the U.S. dollar), Danish krone (euro), and Saudi riyal (U.S. dollar). It is rare for currencies to trade on a ...

Discover how clean float exchange rates work, their benefits, and limits. Learn how supply and demand shape currency value without government interference.

In part, low inflation is associated with fixed exchange rates because countries with low inflation are better able to maintain an exchange rate peg. But there is also evidence of causality in the ...