Is there a case for more managed exchange rates

viewed by many observers as a failure of the floating exchange rate system, and has been a major stimulus to calls for a return to a more managed global exchange rate system. Critics of the current international monetary arrange-ments argue that tighter international "rules of the game " in macroeco-nomic policymaking would reduce the large swings in exchange rates and in global economic activity that have been experienced since the breakdown of fixed exchange rates in 1973. These critics also suggest that better policy coordination and tighter rules of behavior will be necessary for a smooth adjustment to the immediate problem of a grossly overvalued dollar. Policy recommendations of these critics run across a wide spectrum, ranging from incremental measures such as enhanced consultations among the major economies, and enhanced International Monetary Fund surveillance, to dra-matic changes such as a return to fixed exchange rates among the major industrial countries. This paper looks at the case for a return to tighter international rules of