Flexible exchange rate better for welfare
Flexible exchange rates yield higher welfare levels than fixed exchange rates, new research from the Bundesbank posits.
The research shows that the welfare ranking of fixed and flexible exchange rate regimes depends on the interplay between the degree of exchange rate pass-through and the elasticity of international substitution.
The research looks at non-euro European countries: the Czech Republic, Hungary, Poland, Slovakia, Sweden and the United Kingdom.
Click here to read the paper
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