In the final years of the Second World War, he started to write again on the same theme. What should a European federation do? His views were ambivalent in a way reminiscent of today’s debate. Einaudi is absolutely clear about the urgent need for “unifying some economic matters”, among these money.
These are small open economies in which external shocks are often large, and the excessive volatility inherent in free-floating exchange rates can be costly. As a consequence, many developing and emerging market countries both intervene in the foreign exchange markets and impose restrictions on capital inflows and outflows. Why not simply peg the exchange rate?