1. The different forms of currency regimes and their impact on Essay

1. The different forms of currency government activitys and their impact on economic activity - Essay grammatical caseThe currency government that a country adopts may have an effect on its economic harvest-festival this is collaborated by the breakdown of Breton Woodss countries, which adopted different types of regimes after the collapse of their union. The different types of regime that countries adopt have, largely affect their economic performance depending on their magnitude of their external trade or liberalization of their economy. Initially, there were two widely accepted currency regimes, which included floating and fixed supercede rates. However due to the dynamics in the international economic placement and the desire of states to balance mingled with independent monetary policy, rigidly fixed exchange rates and completely fixed capital mobility, some(prenominal) other monetary regimes have cropped up, these include float, dollarization, pegged float, currency boa rds and fixed currency regimes. In this paper, I am interested to study the different kinds of currency regimes and their impact on economic activity. In the next section, I will discuss the different forms of currency regimes and their use in section three, I will give out how these currency regimes have influenced economic activities of countries.This type of currency regime allows a currencys hold dear to fluctuate depending on the exchange rate market in the current economic system, most of the currencies such(prenominal) as the United States dollar, the Japanese yen and the euro are floating currencies. However, in some instances, central banks of the individual countries enter the market in order to influence the exchange rates. The use of floating currency regime enables a country to be able to mitigate the effects of shocks in the international economic system (Miles, 2006, p91).Dollarization can be viewed as currency substitution where another country uses dollar as its provided currency or alongside another currency. The United States dollar is the currency that is most used as a substitute