This book contains the papers, comments, and the discussion at a conference on "Flexible Exchange Rates and Stabilization Policy", held at Saltsjobaden, Stockholm, August 26–27, 1975. The papers integrate the flexible exchange rates theory with macro theory and stabilization policy analysis. .

A growing number of countries are adopting flexible exchange rate regimes because flexibility offers more protection against external shocks and greater monetary independence. Other countries have made the transition under disorderly conditions, with the sharp depreciation of their currency during a crisis. Regardless of the reason for adopting a flexible exchange rate, a successful transition depends on the effective management of a number of institutional and operational issues. The authors of this Economic Issue describe the necessary ingredients for moving to a flexible regime, as well as the optimal pace and sequencing under different conditions.

This anthology of significant writings by eminent economists is, in part, a critique of the Bretton Woods system of fixed exchange rates, which was very successful at the time it was instituted but which, because of its rigidity, failed in the end to address the economic problems of the post-war era. The authors suggest that the stock market crash of 1987 might not have occurred if market forces had been allowed simply to run their course in the absence of any real economic restrictions. Contributors include: Harry Johnson, Fritz Machlup, Milton Friedman, Gottfried Haberler, Henry Wallich, Alan Greenspan, Leo Melamed, Jacques de Larosiere, Beryl Sprinkel, Michael L. Mussa, Martin Feldstein, Jacob Frenkel, Rudiger Dornbusch, Morris Goldstein, Rachel McCulloch, Paul R. Krugman, William H. Branson, Thomas D. Willett, J. Carter Murphy.

This book provides a comprehensive survey of of the theory of and empirical evidence on the determination and effects of exchange rates. It utilises both diagrammatic and mathematical representation of the underlying models, resulting in a comprehensive reference for those engaged in this field of study.