ABSTRACT
In many places in the world, especially universities and research institutes, the economics of exchange rates are the object of intensive research; and in many other places-governments and central banks, policy councils and newspaper offices-exchange rate policies are matters of active and often heated discussion. But nowhere in the world is the interaction between the scientific and the policy aspects of exchange rates-between “how do they work?” and “what should be done about them?”—as close and intense as in the International Monetary Fund. Over its entire 50 years, from the proud announcement setting the initial par values in 1946 to the almost pained admission of a misalignment (since reversed) of the major currencies in the spring of 1995, the IMF has been at the very center of thought and actionresearch and policymaking-about exchange rates.
