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Glossary


Bretton Woods system  The international monetary system in place from 1945 to 1971, in which exchange rates were fixed to the U.S. dollar, and the dollar was convertible into gold at $35 per ounce.
Capital controls  Government-imposed barriers to investment across international boundaries; restrictions on the ability of foreigners to buy and sell domestic assets.
Capital inflow controls  Government restrictions that restrict the flow of funds into a country to purchase domestic assets.
Capital outflow controls  Government restrictions on the flow of funds out of a country to purchase foreign assets.
Currency board  A fixed-exchange-rate system in which the central bank commits to holding enough foreign currency assets (often dollars) to back domestic currency liabilities at a fixed rate.
Dollarization  One country's formal adoption of the currency of another country for use in all its financial transactions.
Foreign exchange intervention  The purchase or sale of foreign exchange by government officials with the intention of moving the nominal exchange rate.
Gold standard  A fixed-exchange-rate regime in which the currencies of participating countries are directly convertible into gold.
Hard peg  An exchange-rate system in which the central bank implements an institutional mechanism that ensures its ability to convert a domestic currency into the foreign currency to which it is pegged.
Speculative attack  A crisis in which financial market participants believe the government will become unable to maintain its exchange rate at the current fixed level, so they sell the currency, forcing an immediate devaluation.







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