In:
Canadian Journal of Economics and Political Science, Cambridge University Press (CUP), Vol. 22, No. 2 ( 1956-05), p. 221-233
Abstract:
On October 1, 1950, Canadian authorities abandoned the policy of maintaining a fixed rate of exchange for the Canadian dollar for the first time since the beginning of the Second World War. Thereafter the dollar was allowed to fluctuate with little interference from official quarters. The significance of this event extends beyond the evolution of exchange policy in Canada, for it must have affected the attitudes of those countries that have been studying a more flexible exchange system than the one envisaged by the Articles of Agreement of the International Monetary Fund. Canadian monetary authorities have been pursuing a policy designed to reduce changes in the value of the Canadian dollar. Official policy has been described as follows: “Transactions of the Exchange Fund Account in the market in United States dollars were directed to helping to maintain orderly conditions without preventing basic supply and demand factors from determining the level of the rate.” It is argued in this paper that a stabilizing agency that operates according to the commonly accepted principle of resisting all movements in the rate does not, in fact, contribute to that rate's stability. An examination of the operations of the Canadian Exchange Fund Account from September, 1950, to December, 1954, supports this argument. An analysis of the meaning of stabilizing policy will precede the discussion of Canadian experience.
Type of Medium:
Online Resource
ISSN:
0315-4890
,
1920-7220
Language:
English
Publisher:
Cambridge University Press (CUP)
Publication Date:
1956
detail.hit.zdb_id:
2053066-3
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