The imperfections and ongoing evolution of market institutions have inspired a rich and insightful literature within economics. Returning to the first question, how do buyers and sellers find one another in the real world? Each side might be aware that potential counterparties exist, but not where and when to find them.
A second lesson is that the responses of exchange rates and international financial flows to monetary policy innovations have shifted over time, especially in the light of the differences between “traditional” macro-financial environments and the current environment in which short-term policy rates are either low or negative and central bank balance sheets have expanded so much.