The Canadian Decision to Free the Exchange Rate

Abstract

In Chapter I this paper examines why the flexible rate system was adopted by the Canadian government. The author believes that he has avoided involvement in the technicalities of the Canadian securities market during his appraisal of the Canadian problem. Chapter II explores the effectiveness in domestic policies under both fixed and free exchange rate systems and observes the role of capital mobility. In Chapter III the author attempts to show that the Canadian decision to free the rate made monetary policy more effective.