First, changing demographic trends will result in an ageing population and an increase in demographic-sensitive spending areas such as pension and health care costs. Acting now, when the demographic structure is still relatively favourable would reduce the overall eventual cost of adjustment.
A newer critique of floating exchange rates contends that exchange rates are more volatile than can be explained by the macroeconomic fundamentals and, moreover, that this excess volatility has in some cases inhibited international trade (Flood and Rose, 1995; Rose, 2000; Klein and Shambaugh, 2004).