This paper argues that (i) for many developing countries, the optimal external payments regime would be a combination of an intermediate exchange rate with capital controls and (ii) the policy stance and advice of the IMF should reflect this view. The paper uses India as a case-study to...

While favoring relatively more flexible regimes, emerging economies in East Asia and elsewhere appear to heavily manage their currencies despite being officially described as “floaters”. In other words, revealed preferences of regional monetary authorities appear to indicate a high...