But as I have indicated today, I believe that floating exchange rates are generally to be preferred either to fixed exchange rates or - except in those relatively rare cases in which the criteria for an optimum currency area are met - to currency unions. This view seems to be spreading.
According to the International Monetary Fund (2004), for example, inflation-targeting countries are becoming more numerous as countries that fix the exchange rate become fewer.9 Consistent with this observation, average inflation rates in both industrial and developing countries are near their lowest levels in four decades, reflecting the new emphasis in policy.