Research on the Choice of Exchange Rate Regimes and Economic Stability in Transition Countries - A Comparative Analysis of China and Russia

Author: Wu Liangcheng
Publisher:
Publish Date: 2006-05-01
Features: With the continuous development of human society, global economic integration has become an inevitable trend. Its two important stages or processes are the gradual establishment of labor division on a global scale and the increasing rapidity of international capital flows. Sovereign states and their currencies still naturally exist, people cannot move freely, and the world is far from being a "great unity." This makes exchange rates the main bridge and link maintaining this integration. As the process of integration deepens, countries that are isolated and self-sufficient are becoming fewer, which is directly reflected in the increasing number of countries adhering to Article VIII of the International Monetary Fund, i.e., countries with open current accounts. Against this background, an ideal international monetary system should be able to promote international trade and capital flows, forming an effective economic order, and the exchange rate system is an extremely important part of this order. Since the collapse of the Bretton Woods system, a series of global financial crises (such as the Latin American debt crisis in the 1980s, the currency crises in the UK, Mexico, and Russia in the 1990s, and the recent Southeast Asian financial crisis) are closely related to the arrangement of exchange rate systems, making the choice of exchange rate systems an extremely important issue that countries, especially those in transition economies, need to face.